Probate is a court proceeding that occurs when a deceased has left a will to direct how his or her assets are to be distributed. In the absence of a valid will, the person’s estate will be administered by the courts according to intestacy law. Settlement of an estate by either of these processes not only takes time but also incurs court fees and other costs and risks possible legal contests. As a result, many estate planners use methods of transferring property that do not require court approval.

In many cases, property is already held in a legal status that causes it to shift ownership upon death. The most common of these is a joint tenancy with right of survivorship, by which property will go to the surviving owner upon the death of the other. A similar form of ownership, called tenancy by the entirety, is how married couples typically own real estate. Both forms are different than a tenancy in common, by which multiple owners hold shares of a property that flow into their estates upon death.

Other ways property can be transferred outside the probate process include:

• Living trusts — Everything included in a living trust, created by the decedent during his or her lifetime, passes upon death to a designated trustee. The property can then be transferred to beneficiaries as the trust directs, without court oversight. Another advantage or a living trust is that it can be amended or revoked during the creator’s lifetime.
• Transfer on death (TOD) — This method, also known as payable on death (POD), is often used in bank accounts, securities and brokerage accounts and mutual funds. It can also be used for real estate by means of a TOD deed. When the owner of the property dies, the beneficiary becomes the owner. The beneficiary has no rights in the property until then, although the original owner can authorize certain actions by granting power of attorney.
• Named beneficiary — A life insurance policy, IRA, pension or other retirement account will typically include a named person who receives benefits in the event of the death of the holder. Annuities can also have designated beneficiaries, except for annuities that terminate upon the original recipient’s death.

While many assets can be excluded from probate by these methods, it is still advisable to execute a will so that other, unspecified property — known as the residuary estate — will be distributed according to your wishes. The will can also serve as a failsafe in the event that any assets transferred by other means do not reach their intended recipients for any reason.

Anker Law Group can advise you about effective transfers of property that avoid probate while carrying out your goals and objectives. Please call our Rapid City office at 605-519-5967 or contact us online to arrange a consultation.