• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The Potter Law Firm

North Carolina and Kentucky Estate Planning Attorneys

phone iconNC (704) 944-3245
KY (606) 324-5516
Attend A Free Seminar - KY Attend A Free Webinar - NC/SC THIS IS AN ADVERTISEMENT

  • Home
  • About Us
    • About Our Firm
    • Attorney and Staff Profiles
  • Practice Areas
    • Asset Protection & Business Planning
    • Elder Law & Medicaid Services
    • Estate and Gift Tax Figures
    • Family-Owned Businesses & Farms
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • Pet Planning
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Nursing Home Planning
    • Veterans Benefits
  • Communities We Serve
    • Kentucky
      • Boyd County
        • Ashland
        • Florence
      • Kenton County
        • Covington
        • Fort Mitchell
        • Independence
    • North Carolina
      • Mecklenburg County
        • Charlotte
        • Davidson
        • Huntersville
  • Resources
    • Definitions
    • DocuBank
    • Elder Law
      • Elder Law Links
      • Elder Law Reports
      • Local Elder Law Resources
        • Ashland Elder Resources
        • Covington Senior Resources
        • Huntersville Elder Law Resources
        • Independence Senior Resources
    • Elder Law Reports
    • Emergency Legal Documents
    • Free Estate Planning Seminars
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Estate Planning
      • Frequently Asked Questions for Families Without an Estate Plan
      • IRA & Retirement Planning
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid
      • Pet Planning
      • Trust Administration & Probate
    • Is Your Estate Plan Outdated?
    • Kentucky Probate Resources
      • Ashland, Kentucky Probate Resources
    • Newsletters
    • North Carolina Probate Resources
      • Huntersville, NC Probate Resources
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Elder Law Reports
      • Estate Planning for Niches
      • Trust Administration
  • Contact Us
  • BLOG
Home » Estate Planning » Should I Use a Transfer on Death Account to Avoid Probate?

Should I Use a Transfer on Death Account to Avoid Probate?

September 2, 2021 by John Potter

transfer on death accountsProbate is a legal process that will be necessary if you rely a simple will to state your final wishes. You would name an executor in the document to take care of the hands-on tasks, and the court would supervise while the estate is being administered.

It serves a purpose because final debts are paid during probate, and the validity of the will is determined. If anyone wants to contest the terms, they can come forward while the estate is being probated by the court.

There is nothing inherently wrong with probate, but it is often not the best outcome for the rightful inheritors. Inheritances generally are not distributed until the end of the probate, and it will usually take eight months at minimum in most areas.

Another drawback is a loss of privacy because probate records are available to the general public, and there are expenses that are incurred during the process.

Transfer on Death Accounts

A transfer on death or payable on death account is an account that has a beneficiary, and you can name multiple beneficiaries. The beneficiary would not be able to access the assets while you are living, but they would inherit the resources after your passing. This transfer would not be subject to probate.

You can establish a payable on death account at a bank, and transfer on death accounts are offered at brokerages. A 401(k) account can be looked upon as a type of transfer on death account because you name a beneficiary who would assume ownership of the account after your death.

In some states, you can choose a transfer on death option when you register your motor vehicle, but Kentucky and North Carolina are not among them.

When you have a payable on death account or transfer on death account, you can designate different percentages for each person you name as beneficiary. Years ago, some institutions would require all the beneficiaries to receive equal amounts.

If you have multiple beneficiaries and one of them passes away before you do and you make no changes, the remaining beneficiaries would generally inherit the assets proportionately, depending on the standard practices adopted by the financial institution.

On the other hand, if there is one beneficiary that predeceases you, and you do not name an alternate, the assets would become part of your estate. The probate court would be involved in the eventual transfer of these assets.

A Revocable Living Trust Is a Better Choice

Another, and often better, option is to use a revocable living trust as your estate plan centerpiece if you want to facilitate asset transfers outside of probate.

If you establish a revocable living trust, you would be the trustee so you would not surrender control to anyone else. You can change the terms at any time, and since it is a revocable trust, you can rescind it and take back direct personal possession of the property if you choose to do so.

The asset ownership would be consolidated, and this would simplify the administration process after your passing. When you establish the trust, you would name a successor trustee to complete the administrative tasks. Of course, your heirs would be the beneficiaries.

You can set specific terms for how to distribute the assets after your passing. If you do not want to provide lump sum distributions, you can instruct the trustee to spread them out over a period of time.

Another benefit is the ability to name a disability trustee to administer the trust in the event of your incapacity. This is critical because a significant percentage of elders become unable to handle their own affairs late in their lives.

After your passing, probate would not be a factor when the trustee is distributing assets. You get this benefit along with all the others so a living trust is frequently a superior asset transfer method.

Schedule a Consultation Today!

We are here to help if you are ready to work with an Ashland, Kentucky estate planning lawyer to put a plan in place. You can set up a consultation if you call us at 606-324-5516, and our number in Florence, Kentucky is 859-372-6655.  Our Charlotte, NC and Huntersville, NC locations can be reached at 704-944-3245.

If you would rather send us a message, fill out our contact form and we will get back in touch with you promptly.

  • Author
  • Recent Posts
John Potter
Latest posts by John Potter (see all)
  • What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
  • How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
  • Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022

Filed Under: Estate Planning Tagged With: Living Trusts, Probate Avoidance, transfer on death accounts

Other Articles You May Find Useful

How to Gift to Your Grandchildren in Your Estate Plan
pour-over will
What Happens If I Leave Property Out of My Living Trust?
estate tax
2022 Estate Tax Exclusion Has Been Set
QTIP trust
How Can You Protect Your Children’s Inheritances If You Get Remarried?
probate
Are There Any Probate Shortcuts in North Carolina?
life estate
What Is the Purpose of a Life Estate?

Free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
Texting Permission

Follow Us

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

Subscribe to Our Blog

  • This field is for validation purposes and should be left unchanged.

Testimonials

default image

Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

DKS & KMS Client Review August 28, 2020

default image

John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

David J. Client Review August 28, 2020

default image

My husband and I selected Ms. Potter to assist with our small business. She responsive and attentive every time I have a question or need assistance, and is extremely knowledgeable and able to answer any legal question I have had. I know I can count on Ms. Potter for all of my business legal needs and I would highly recommend her to anyone needing legal assistance with such.

Jillian Client Review August 28, 2020

<< Prev
Next >>

Where We Are

Ashland

ASHLAND
1620 Carter Avenue
Ashland, KY 41101-7631
Phone: (606) 324-5516
Fax: (606) 324-4766

Charlotte

CHARLOTTE
15720 Brixham Hill Avenue
Suite 300,
Charlotte, NC 28277
Phone: (704) 944-3245

Huntersville

HUNTERSVILLE
11330 Vanstory Drive
Huntersville, NC 28078
Phone: (704) 944-3245

Northern Kentucky

NORTHERN KENTUCKY
7310 Turfway Road
Suite 550,
Florence, KY 41042
Phone: (859) 372-6655

Office Hours

Monday8:30 AM - 4:30 PM
Tuesday8:30 AM - 4:30 PM
Wednesday8:30 AM - 4:30 PM
Thursday8:30 AM - 4:30 PM
Friday8:30 AM - 3:00 PM

Map/Location

potter_sidbr_map
potter law logo
  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Privacy Policy | Terms of Service | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys

© 2023 American Academy of Estate Planning Attorneys, Inc. THIS IS AN ADVERTISEMENT