Comparing Probate-Avoidance Methods

Given the plentiful drawbacks of probate, it's not surprising that people have sought ways around it. In a nutshell, you can avoid probate by using other documents, in place of a will, to leave property at your death.

Forty years ago, almost the only way to avoid probate was by using a trust, but now there are many options, none of which requires hiring a lawyer. People have eagerly taken up each new probate-avoidance method; as much property now passes to the next generation through nonprobate transfers as goes through probate, according to legal experts.

Keep in mind that you can mix and match methods when you're planning to avoid probate. You may well want to use one technique for avoiding probate of real estate and another for stocks, for example. Some options for common kinds of assets are listed below. Not every option is available in every state, and each has advantages and limitations.

Choosing the Right Probate-Avoidance Method
Asset	What You Can Do to Avoid Probate
Real estate	Transfer to a living trust Hold property in joint tenancy with a co-owner or tenancy by the entirety with your spouse Hold as community property with right of survivorship with your spouse Use a transfer-on-death deed
Bank accounts, certificates of deposit	Name a payable-on-death beneficiary Hold in joint tenancy with a co-owner or tenancy by the entirety with your spouse Hold as community property with right of survivorship with your spouse
Stocks and bonds	Name a transfer-on-death beneficiary Transfer to a living trust Hold in joint tenancy with a co-owner or tenancy by the entirety with your spouse
Government bonds	Register ownership in beneficiary form Hold in joint tenancy with a co-owner or tenancy by the entirety with your spouse Hold as community property with right of survivorship with your spouse
Cars and other vehicles	Register in transfer-on-death form Hold in joint tenancy with a co-owner or tenancy by the entirety with your spouse Hold as community property with right of survivorship with your spouse
Retirement accounts  (IRAs, 401(k) plans)	Name a beneficiary to inherit at your death

Comparing Probate-Avoidance Methods

Depending on what you own and where you live, you probably have lots of choices.