How can you avoid Probate? Methods for Avoiding Probate, Advice from a Montana Probate Lawyer, Part I:

While the probate process in Montana is not as daunting as it might sound, people often ask me or how to avoid the probate process all together. While my answer really depends on the specific situation there are many ways to transfer property upon your death in Montana, while avoiding probate.

Today’s entry will provide a brief overview of some of the methods to avoid the probate process. However, over the next few weeks I will be posting a series of entries which will explain the advantages and disadvantages of the specific method you can use to avoid probate in more detail.

The most common methods for reduce or eliminate the need for probate include:

• Beneficiary Designations or Transfer-on-Death (T.O.D), Payable-on-Death (P.O.D) Designations

Designating a beneficiary or a Transfer-on-Death (T.O.D), Payable-on-Death (P.O.D) designation for your financial assets is can be a helpful tool in avoiding probate. These designations are used for your financial accounts such as bank accounts, money markets, annuities, brokerage accounts, life insurance and retirement accounts. Most financial institutions have an easy form where you can specify who will receive ownership of the account upon your death. Then, upon your death the person you designated as your beneficiary (or T.O.D. or P.O.D) would be the outright owner of that account. These assets are not considered part of your probate “estate,” and therefore these assets will not have to go through the probate process.

• Joint ownership

Another method commonly used to avoid probate in Montana is joint ownership with the rights of survivorship. If you own something jointly with the rights of survivorship it means that upon the death of the first co-owner, title to the entire property or assets automatically transfers or “vests” in the surviving co-owner.

• Trusts

The one method for avoiding probate for all of your assets, while maintaining full control of these assets is a revocable living trust. A trust is basically a legal agreement where a “grantor” transfers title to property to another person, the “trustee,” to mange it for the benefit of a third party, known as a “beneficiary.” The property is placed in trust while the grantor is alive and upon the grantors death, the beneficiary will receive the trust assets, managed by the trustee according to the instructions set out by the grantor of the trust.

While this sounds like there are a lot of people involved, if you set up a trust during your lifetime, most likely you are the grantor, trustee and the main beneficiary at the same time. You would retain control of all of your assets as you had before, but upon your death your trust remains “alive” therefore no probate is required.

It is important to remember that there are advantages and disadvantages of using each of these tools depending on your specific situation. As a Montana probate and estate planning attorney, I always recommend that you have a valid Montana will or trust and that you discuss your specific situation with an attorney.