One of the goals many people frequently have for their estate plan is to avoid probate. In addition to a revocable living trust, another option, using a beneficiary designation, exists to transfer property at your passing while avoiding the probate
process. A beneficiary designation is a description of to whom the associated property will be distributed at the owner’s death. A common example of a beneficiary designation is the beneficiary listing on a life insurance policy. Beneficiary
designations cannot be added to all types of property.
Beneficiaries can include spouses, children, other family members, other people and charities. Beneficiary designations can be added to bank accounts, securities accounts, retirement accounts, life insurance policies, savings bonds and range of
other assets. Designations added to the account or other property will determine how asset is distributed at owner’s death, regardless of the provisions of the person’s will or trust.
Two specific types of beneficiary designations exist for real estate, financial accounts and other assets. Payable on Death and Transfer on Death designations allow you to add a beneficiary to certain types of accounts and assets. The designated
beneficiary receives the funds or other property at your passing without need for the probate process.