There are three categories of property, and only one requires probate, so it can be accessed when the owner passes away, says njmoneyhelp.com’s recent article entitled “How can we avoid probate for this account?”
First, it’s important to understand that property that passes by operation of law is any asset that’s owned jointly with right of survivorship. These accounts are sometimes labeled as “JTWROS.”
When one co-owner dies, the property passes by law to the surviving co-owner. Probate isn’t needed here.
Married couples typically have most of the accounts held in this manner.
A second category is contract property, which includes life insurance, retirement accounts and any non-retirement accounts that have beneficiaries designated upon death.
These designations supersede or “override” a will and also pass outside of probate directly to the named beneficiary.
These are frequently designated as “POD” (payable on death) or “TOD” (transfer on death).
The third category is everything else. This includes accounts that are owned solely by the person who died with no POD or TOD designation.
A certificate of deposit is a time deposit. It’s a financial product commonly available from banks, thrift institutions and credit unions. Certificates of deposit are different from savings accounts because a CD has a specific, fixed term and usually, a fixed interest rate.
To avoid the probate process to access a CD or any other account owned by a spouse’s name, you can either make the account jointly owned by husband and wife with right of survivorship.
Another option is to designate your spouse designate you as a beneficiary upon death.
Either option will avoid the need to probate the will to access that particular account, like a certificate of deposit.
Contact an experienced estate planning attorney with questions about CDs and probate.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: njmoneyhelp.com (June 6, 2019) “How can we avoid probate for this account?”