One thing that most people can do to simplify their estate situation is to make smart choices with their bank accounts. Bank account planning alone cannot substitute for a well considered, professionally prepared estate plan, but it can make an important difference.
The value of minimizing or even avoiding altogether the hassle, delay, and expense of a court overseen probate cannot be overstated. The use of a trust-based estate plan is an effective method to accomplish this. Probate is the process of administering a will or intestate instate under the watchful eye of the Clerk of Superior Court. With COVID-19 and the typical administrative delays of governmental bureaucracies, the probate process can literally take years to complete these days.
If you are not ready to put together a trust-based estate plan or want to take some initial steps until a comprehensive plan can be put in place, using the right kinds of bank accounts is an excellent start. Most banks offer accounts that can be paid directly to another named individual at the time of your death. These are known as “payable on death” accounts or “TOD -transfer of death” accounts. When you set up an account like this, the balance will go directly to the person you name automatically when you die. There is no need to get any paperwork from the Clerk of Court or take any legal action. For most banks, all that is needed is a death certificate to transfer the account.
Another option, often used by married couples, is the survivorship account. With these accounts, the married couple are joint owners of the account. It is called a “survivorship” account because when one of the spouses dies, the money goes automatically to the surviving spouse. Again, no paperwork is needed from the Court. This is an invaluable tool to allow your spouse to have full access to the account as soon as possible. Plus, you do not have to be married to use this kind of account. You can make your account a “survivorship” account with anyone you choose. Another advantage for both “survivorship” and “payable on death” accounts is that the funds are not subject to probate fees because the money does not funnel through the estate as would otherwise be the case.
There are many components of estate planning. Using bank accounts advantageously is an important part of that planning. At The Doyle Law Offices, P.A., Attorney Hank Doyle has been representing clients in Wake and surrounding counties since 1995. There is no substitute for meeting with an experienced attorney when it comes time to plan your estate. Call us today at (919) 228-4487. We have offices conveniently located in Cary, North Carolina and coming soon in October of 2020, we will be opening an office in Wake Forest to better serve you.