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Integrating Estate Plans into Your Wealth Management Strategy
Integrating estate planning into your financial plan can help align investments, retirement, and tax strategies with long-term goals. Learn more.
Avoid probate and simplify asset transfers with smart estate planning. Learn how trusts, joint ownership, and beneficiary designations can likely help protect your wealth.
How to Structure Your Estate to Avoid Probate
Without a clear estate plan, asset distribution can become a lengthy, expensive, and public process for loved ones left behind. Probate—the legal process of settling an estate—can take months or even years and involves court costs, legal fees, and unnecessary stress. Fortunately, with proper planning, probate can often be avoided, allowing assets to transfer directly to beneficiaries without a court proceeding.
This guide explores strategies for bypassing probate and protecting your estate so your wealth is distributed according to your wishes.
What is ProbatE, and Why Avoid It?
Probate is the court-supervised process of validating a will (if a will exists), appointing a personal representative, paying off debts, and distributing assets. If someone passes away without a will, state law determines how their assets are divided.
While probate serves an important legal function, there are several reasons to avoid it:
- Time and Expense – Probate can take months or even years, and court fees, legal costs, and administrative expenses can reduce the estate’s value.
- Loss of Privacy – Probate records are public, meaning details about assets and beneficiaries may be accessed by anyone.
- Limited Control – When assets go through probate, they are subject to creditor claims. Depending on if the decedent had a will, assets may be distributed according to state law rather than personal wishes.
By taking steps to bypass probate, an estate can be settled more quickly, privately, and with fewer legal hurdles.
Common Tools to Avoid Probate
Estate plans are tailored to individual needs, but several tools are commonly used to keep assets out of probate:
Revocable Living Trust
A revocable living trust allows assets to be placed in a trust while the owner is still alive, with full control retained. Upon the owner’s passing, the assets are transferred directly to beneficiaries without court involvement.
Joint Ownership Arrangements
Property owned jointly can often bypass probate when one owner passes away. Common forms include:
- Joint Tenancy with Rights of Survivorship (JTWROS) – Ownership automatically transfers to the surviving owner(s).
- Tenancy by the Entirety – Similar to JTWROS but in some states, exclusively for married couples.
Beneficiary Designations
Certain financial accounts allow direct beneficiary designations, avoiding probate:
- Payable-on-Death (POD) and Transfer-on-Death (TOD) Accounts – Bank accounts, investment accounts, and securities can be transferred directly to named beneficiaries.
Life Insurance Planning
Life insurance proceeds can be distributed directly to designated beneficiaries without probate, making it a valuable estate planning tool.
Retirement Account Beneficiaries
Most retirement plans, including IRAs and 401(k)s, allow beneficiaries to be named, which means assets can be transferred directly to beneficiaries.
Real Estate Transfer Techniques
Real estate can be transferred outside of probate through:
- Revocable Living Trusts – Holding property in a trust allows for a direct transfer to beneficiaries without probate.
- Transfer-on-Death (TOD) Deeds – Available in some states, these deeds allow property to pass to named beneficiaries without probate.
Key Considerations
Estate planning is not one-size-fits-all. Strategies should reflect financial goals, asset structures, and state-specific laws. Some or all the tools mentioned herein may or may not be beneficial to your situation and should be reviewed individually and on a case-by-case basis.
State-Specific Regulations
Laws governing probate, trusts, and beneficiary designations vary by state. Working with a financial advisor who is familiar with local regulations helps create an effective estate plan.
Tax Implications
Certain strategies can help reduce estate taxes, preserve wealth, and protect assets from unnecessary taxation.
Regular Plan Updates
Life changes—such as marriage, divorce, the birth of children, or business transitions—can affect an estate plan. Regular reviews help keep plans aligned with evolving goals.
Special Circumstances
Some further situations require additional planning to bypass probate:
- Out-of-State Property – Assets in multiple states may need specific planning tools like a trust or TOD deed to avoid probate in each location.
- Digital Assets – Cryptocurrencies and online accounts may require specific instructions for proper transfer.
- Blended Families – State inheritance laws may prioritize certain heirs over others, making careful estate structuring essential.
- Special Needs Beneficiaries – A Special Needs Trust (SNT) may allow beneficiaries to receive assets while maintaining eligibility for government benefits.
- Business Succession Planning – Business interests may require buy-sell agreements, trusts, or designated succession plans to transition ownership without probate.
Implementation
Once an estate plan is structured to avoid probate, proper documentation and record-keeping are crucial. EP Wealth advisors work with attorneys to align financial strategies with legal requirements, helping assets be administered efficiently.
No matter the size or complexity of an estate, planning ahead helps prevent unnecessary delays, expenses, and complications.
To learn more about structuring an estate to avoid probate, connect with an EP Wealth estate planning advisor today.
DISCLOSURES:
- EP Wealth Advisors, LLC. is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.
- An estate plan is a helpful tool that can assist individuals in managing and arranging affairs in the event of death or incapacity. However, the scope and extent of the plan varies depending on the unique circumstances and desires of the individual client. It is for this reason, that the analysis encompassed herein is not intended to be comprehensive in nature nor should it be interpreted as legal advice. Please consult a legal professional to determine the extent, scope, and the drafting and creation of the appropriate estate documents. EP Wealth Advisors is not in the business of providing legal advice or preparing legal documents. Our review is limited to and in association with Financial Planning only.
- Laws vary by state. The information presented herein is intended to be general in nature and may not apply to your state of domicile. Please consult local legal counsel to determine the best practices for your state.
- Request an appointment with an EP Wealth Advisor when you have a minimum of $500,000 in investable assets – which includes qualified retirement plans (IRA, Roth IRA, 401(k), taxable brokerage, cash (savings / checking) and CDs. Investable assets do not include your home, vehicles, or collectibles.
- Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.
- EP Wealth Advisors (“EPWA”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented. All expressions of option are subject to change without notice.
- All investment strategies have the potential for profit or loss. Different types of investments and investment strategies involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be suitable or profitable for a client’s portfolio. The risk of loss can never be eliminated even if working with a professional.
