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There are several options to bypass the probate system. The first is to make heirs co-owners on bank accounts and other assets. In theory, this sounds good because heirs can simply remove the name of the deceased and then split the account balance without going to court. In reality, these setups can result in one heir legally running off with all the money. That’s because all co-owners have full access to the assets. I actually saw this happen with my sister-in-law when her in-laws died. One sister had joint custody of the accounts and was listed on the deed. She took it all and left her two brothers nothing.

Transfer on death provisions on deeds and accounts are another way people can avoid probate. The main risk with these provisions is someone dying out of order – such as a child preceding a parent. What’s more, if an asset is transferred to a minor, probate will have to be opened to administer it anyway.

The easiest way is to set up a revocable trust and transfer assets into the trust. Upon death, the trust can then disburse assets to heirs without going to probate court first. The key is to transfer the assets into the trust. I have seen cases where the trust was created but never “funded” by placing assets into the trust. At death, the family thinking the trust would cause them to avoid probate ended up in probate court because there were no assets in the trust.

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