Avoiding Probate
How to Avoid Probate
Probate is slow (6-18 months), expensive (3-7% of gross estate), and public. The good news: avoiding it is straightforward. A combination of revocable living trust, beneficiary designations, joint ownership, and transfer-on-death accounts can route 80-95% of most middle-class estates around probate entirely. Here is how to do it.
The Short Answer
Five tools combine to avoid probate: (1) revocable living trust ($1,500-$3,500 to set up), (2) retirement and life-insurance beneficiary designations (free), (3) payable-on-death (POD) bank accounts (free), (4) transfer-on-death (TOD) brokerage accounts (free), (5) joint tenancy with right of survivorship for real estate (free in some states; transfer-on-death deed in others). Most middle-class estates can avoid 90%+ of probate with $1,500-$3,500 invested.
How we wrote this: Our editorial team reviewed published rates, court rules, statutes, peer publications, and our own data from working with vetted firms. We do not accept payment for placement, and we do not write sponsored content. More on our methodology →
Why avoid probate
Speed. Probate takes 6-18 months. Probate-avoidance mechanisms typically distribute assets in 4-8 weeks.
Cost. Probate runs 3-7% of gross estate. On a $1M estate that's $30,000-$60,000 in fees. Trust administration after death typically runs $1,500-$5,000.
Privacy. Probate filings are public. Trust administration is private.
Complexity. Probate involves court hearings, statutory notice, formal accountings, and sometimes contested filings. Trust distribution is administrative.
Multiple states. Real estate in multiple states triggers probate in each. Trusts handle multi-state real estate without ancillary probate.
Tax considerations. Probate avoidance doesn't avoid estate tax (federal or state) - estate tax applies to probate and non-probate assets alike.
When probate makes sense. Some estates benefit from probate's procedural protections - particularly when creditors are aggressive or beneficiaries are likely to fight.
Tool 1 - Revocable living trust
The foundational probate-avoidance tool. Holds assets during life; distributes at death without court involvement.
How it works: you create the trust, name yourself as trustee during life, and re-title assets in the trust's name. At death, your named successor trustee takes over and distributes per trust terms.
Cost: $1,500-$3,500 from a lawyer for a typical individual or married couple. LegalZoom-class trusts cost $300-$800 but are typically inadequate for any complexity.
What goes in: real estate, brokerage accounts, bank accounts (sometimes), business interests, valuable personal property.
What does NOT go in: retirement accounts (don't transfer ownership; beneficiary designations do the work), life insurance (beneficiary form does the work), vehicles in some states (DMV transfer-on-death procedures or small-estate affidavits).
Funding is critical. The trust only works for assets actually titled in the trust's name. Many DIY trusts are unfunded - the trust exists on paper but holds nothing. Lawyer-drafted trusts include funding instructions and often help with the funding step.
After death, trust distribution typically takes 30-90 days vs. 6-18 months for probate.
Tool 2 - Beneficiary designations
Retirement accounts (401k, IRA, 403b, Roth, SEP, SIMPLE). Beneficiary form on file with the custodian controls. Pass outside probate. Free to update.
Life insurance. Beneficiary form on file with the carrier controls. Pass outside probate.
Annuities. Beneficiary designation controls.
Pensions. Default beneficiary is typically the spouse; can sometimes be changed with spousal consent.
401k beneficiary - federal ERISA rule typically requires spouse to be primary beneficiary unless spouse signs waiver. Important if you want to leave 401k to children from a prior marriage.
IRA beneficiary - state law and IRS rules; usually more flexibility. Stretch-IRA strategies under SECURE Act are 10-year limited.
Update designations after every major life event - marriage, divorce, birth, death of a beneficiary. The will does NOT override the beneficiary form. The beneficiary form controls.
Common mistake: divorce decree gives 401k to ex-spouse but the beneficiary form still names the new spouse. Multi-million-dollar litigation has resulted from this discrepancy.
Tool 3 - Payable-on-death (POD) accounts
Bank accounts (checking, savings, CDs) can have a payable-on-death beneficiary designated.
Free to set up - just sign a card with the bank.
On death, the named beneficiary shows the death certificate and the account transfers immediately.
Multiple beneficiaries allowed in most states - typically split equally unless specified otherwise.
POD accounts pass outside probate - even if you have a will saying otherwise. The POD form controls.
Useful for: emergency funds, household checking accounts, savings accounts you want to pass to specific people.
Limitation: POD beneficiary must be living. If beneficiary predeceases, the account becomes part of the probate estate unless contingent beneficiary is named.
Tool 4 - Transfer-on-death (TOD) accounts
Brokerage accounts and individual stock holdings can have transfer-on-death beneficiaries.
Free to set up with the brokerage.
Operates similarly to POD - on death, beneficiary presents documentation and the account transfers.
Multiple beneficiaries allowed.
Pass outside probate; will does not override the TOD form.
Useful for taxable brokerage accounts, individual stock certificates, mutual fund holdings outside an IRA.
Some states also allow transfer-on-death registration for vehicles and even real estate.
Tool 5 - Joint ownership and TOD deeds for real estate
Joint tenancy with right of survivorship (JTWROS). Two or more co-owners; on death of one, the survivor takes the entire property. No probate.
Tenancy by the entirety (between spouses, in some states). Similar to JTWROS but with additional creditor protection.
Considerations: JTWROS subjects the property to all owners' creditors during life. A child added as joint owner exposes the property to that child's creditors. May trigger gift tax. May lose stepped-up basis at death.
Transfer-on-death deeds (TOD deeds, Beneficiary deeds, Lady Bird deeds in some states). Allowed in roughly 30 states. The deed records a future transfer effective at death.
TOD deed advantages: full control during life (you can sell or revoke); no gift tax; no creditor exposure during life; stepped-up basis at death.
Cost: $200-$500 to draft and record a TOD deed.
States allowing TOD deeds: Arizona, Arkansas, California, Colorado, DC, Hawaii, Illinois, Indiana, Kansas, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, New York (limited), North Dakota, Ohio (Lady Bird), Oklahoma, Oregon, South Dakota, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, Wyoming - and a few others.
Combining the tools
Most modern estate plans use all five tools.
Real estate in revocable living trust (or joint ownership / TOD deed).
Bank accounts: small operating accounts in your name with POD beneficiary; main savings in revocable living trust.
Brokerage / investment accounts: in revocable living trust or with TOD designations.
Retirement accounts: stay in your name; update beneficiary designations.
Life insurance: stay in your name; update beneficiary designations.
Vehicles: in your name; some states allow TOD registration.
Personal property: pour-over will catches anything not specifically titled, directing it into the trust.
Result: 90%+ of estate value passes outside probate. The remaining bits go through pour-over will or small-estate affidavit if applicable.
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Frequently asked questions
Will avoiding probate save on taxes?
No. Estate tax applies to probate and non-probate assets alike. Probate avoidance saves time and probate fees, not estate tax.
Should I just put my house in joint ownership with my kids?
Often a bad idea. Adding a child to title triggers gift tax, exposes the home to the child's creditors, and may eliminate stepped-up basis. A trust or TOD deed achieves the goal without these problems.
Do I still need a will if I have a trust?
Yes. A pour-over will catches anything not in the trust and directs it there. Plus, if you have minor children, the will names the guardian.
How much does it cost to avoid probate?
$1,500-$3,500 for a full estate plan with a revocable living trust. POD/TOD designations are free. Some states have additional fees for TOD deeds ($50-$300 to record). Total: $1,500-$4,000 typically.
Is probate avoidance worth it for small estates?
Yes - even modest estates spend $5,000-$15,000 in probate fees and 6-12 months in delay. The trust pays for itself the first time around.
Can I avoid probate without a lawyer?
Beneficiary designations and POD/TOD accounts: yes, free. A revocable living trust: technically yes (LegalZoom etc.) but the funding step is critical and often skipped, defeating the purpose. A $1,500-$3,500 lawyer-drafted trust with funding guidance is worth it for most people.
Related reading
One last thing. This article is general information, not legal advice. Every situation is different. The free consultation is the right next step. — The LawFirmSquare team