J. Kelly Kennedy, Attorney/CPA, PLLC

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Attorney and CPA

Certain types of accounts can help to avoid probate issues

Anyone in the Polk County area who has thought about the future of their estate after their death may be interested in learning about ways to make the distribution of their assets easier for their surviving beneficiaries. After a person dies, the estate administration process can be cumbersome for the deceased person's personal representative. This is one of the many reasons that people try to find ways to simplify the distribution of their assets upon their death.

Estate administration may be easier if the person plans their estate so that their assets do not pass through probate. The probate process is where a Florida court verifies the validity of a deceased person's will and then opens his or her estate to distribute all of the assets and pay any of the estate's debts. However, certain assets like life insurance and retirement accounts pass directly to the deceased person's heirs without the need for probate. By contrast, a standard investment or brokerage account does pass through probate.

One way to distribute an investment account without having it go through probate is to register it as a transfer on death (TOD) account. A TOD allows the investment account holder to have complete control of their account during their lifetime, but it then immediately transfers to a beneficiary when the original account holder dies. Also, the account holder can change the beneficiary of the account at any time during their life.

A TOD account designation is a planning tool that is sensible for some people when it comes to avoiding probate issues and making the administration of their estate simpler after their death. On the other hand, it might not be a perfect fit under all circumstances. People in Winter Haven or Lakeland who want more information about TODs or any other estate administration issues may want to contact an estates and trusts attorney.

Source: Kiplinger, "How Your Brokerage Account Can Bypass Probate," Kimberly Lankford, July 10, 2015

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