Many of us hear that it is a good idea to avoid probate by making sure that held assets have a named beneficiary, such as is the usual case with an IRA or a life insurance policy. Another example of avoiding probate is to set up the ownership of accounts in survivorship with another person. Avoiding probate in this fashion does have some benefits, such as allowing quick access to a deceased person’s assets which are held jointly or are payable to a named beneficiary. Avoiding probate, however, will not avoid probate court fees, which are based on a percentage of the total assets of a deceased person, not just what passes through the probate process.
Taken to the extreme, probate avoidance may have other disadvantages, such as the following potential situations:
- Putting a child’s name on a bank account creates a presumption that the entire account passes to such child upon the death of the original account holder. This may not have been the account owner’s intent.
- Creditors of the person whose name has been added to a bank account may attempt to garnish or levy the account for an unpaid debt, or the joint owner may withdraw funds against the wishes of the contributing account owner.
- Ownership of securities in joint names will require that all owners consent to sales and purchases, which may be inconvenient or unwieldy.
- Upon the death of the original owner, the joint co-owner is not obligated to share the account with the other members of the deceased’s family/heirs who are not named as co-owners. In some cases, the joint account holder may not be willing to pitch in part of the joint account towards the decedent’s administration, funeral and burial expenses.
- Joint owners and beneficiaries sometimes die before the owner of the asset, so there may need to be probate of these assets after all. A valid Will is still important to have, since it will control any assets passing through probate.
Anyone deliberating whether to structure an estate to avoid probate should give serious consideration to meeting with an experienced Trusts and Estates attorney to conduct an analysis of whether avoiding probate would be in the estate’s best interests. Dzialo, Pickett & Allen, P.C. is ready to assist you through this process, and we encourage you to have a consultation with us to understand this potentially complex area of Connecticut law.
-D. Jeanne Messick, Esq.
Disclaimer: While this blog provides general information, it does not constitute legal advice. The best way to get guidance on your specific legal issue is to contact a lawyer. To schedule a meeting with an attorney, please call one of our lawyers at (860) 316-2741. The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship.