In this instructional video, estate‑planning attorney Jerry Taylor explains why probate can trap families in costly, months‑long court battles and presents five practical legal tools that keep assets out of probate. He begins with a brief warning about probate’s time and expense, then walks through each strategy: 1. Revocable Living Trust – a flexible document that holds all titled assets during life and instantly transfers them to a successor trustee upon death, avoiding public records and court involvement. He notes the need to fund the trust fully and links to a deeper guide on trust funding. 2. Transfer‑On‑Death (TOD) Deed – a one‑page county filing that names a beneficiary for a primary residence, allowing the owner to retain full control while ensuring the house passes directly at death. He mentions state variations (Lady Bird/Beneficiary deeds) and that not all states permit them. 3. Beneficiary Designations on Retirement and Life‑Insurance Accounts – naming a beneficiary on 401(k), IRA, pension, or life‑insurance policies bypasses probate, but improper designations can trigger unwanted tax consequences or lack creditor protection. 4. Payable‑On‑Death (POD) and Transfer‑On‑Death (TOD) Bank/Brokerage Accounts – the “cleanup” tool that covers any leftover checking, savings, or investment accounts not placed in a trust. A simple bank form names a beneficiary, preventing forgotten accounts from entering probate. 5. Lifetime Gifting – using the annual gift‑tax exclusion (currently $19,000 per recipient) to move cash or low‑appreciation assets out of the estate, reducing probate exposure. He warns against gifting highly appreciated assets like a primary home because of capital‑gains tax implications. Throughout, Taylor highlights pitfalls, state‑specific restrictions, and tax considerations, urging viewers to verify their plans with an attorney and financial advisor. He concludes with a call‑to‑action to register for a free live workshop that walks participants through building a complete probate‑avoidance plan in 30‑60 days, and a plug for a deeper video on trust funding.
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When you pass away, your family could spend over a year stuck in court waiting to inherit anything that you left them, and they could lose tens of thousands of dollars in legal fees in the process. That's called probate, and there are 5 legal strategies that can keep your family completely out of probate court. Now, I've been an estate planning attorney for decades, and I've watched hundreds of families set these up the right way so that their loved ones inherited everything from them within weeks or months of their passing instead of fighting for it in court for well over a year. So in this video, I'm going to walk you through the 5 best strategies to avoid probate, and by the end of it, you'll know exactly which ones your family needs and how to set them up the right way. Now let's get into it. Strategy number 1, is a revocable living trust. It's the first strategy, and it is the one that I recommend to almost every family that I work with. Revocable living trust. Let's say you pass away on a Tuesday, and without a revocable trust, your family does not get access to your house, your bank, all your accounts there, or your investments for the next 9 to 18 months while everything sits in probate court until a judge allows it. They're paying thousands in court fees. Every detail of what you own becomes part of the public record. Then they're often fighting with each other over who gets what because the court has to sort those things out. And with a revocable trust, none of that happens. The trust already owns everything the day you pass. So quite literally, the day after you pass away, the person you named as your successor trustee can step in and start handling things immediately. They can go put a for sale sign up in the front yard of your home on day one. Family gets access to the money within a very short period of time and none of it becomes public. There's also nothing for the court to decide because you already decided it. This is the basis of what a revocable living trust does. It's a legal document that holds your assets while you're alive. And tells the world exactly what happens to them when you die. So you stay in full control the entire time. You can change it, you can add to it, you can cancel it if you want to, whatever you want to. And the IRS treats everything inside of it the same as if you owned it personally. So there are no tax differences whatsoever. The trust also protects you while you're alive. So if you get to a point where you can't make decisions, for yourself anymore. Without a trust, your family would have to go to court and get permission just to pay your bills or manage your finances. With a trust, your successor trustee steps in the same day without the court having to get involved. Now, the downside of a revocable trust is that it only protects the assets you actually put in it. So you put your home in it, your bank accounts, your investment accounts,, but if you've got a bank account out there that nobody knows about and you miss it, you don't put it in your trust, it's going to have to go through probate when you die. Now, I made a full video on how to fund a trust the right way. So I'll link it at the end of this video if you want to go deeper on that. Strategy 2 would be a transfer on death deed. So the second strategy is a type of deed which works for one specific asset., and that is your home. So let's say your home is the main thing you're worried about leaving behind. It's your biggest asset in your estate. Maybe you don't have a big stock portfolio or a business to pass down, but you've spent 30 years paying off that house and you want to make sure that it goes directly to your kids without them having to fight the court for it. For whatever reason, a Transfer on Death Deed is the simplest legal tool that exists exactly for that situation. It's a one-page form, typically in most parts of the country. You file it in your county that names whoever you want to inherit the property when you die. Some states call a type of it a Lady Bird Deed or a Beneficiary Deed, but they all do the same thing. This strategy allows you to stay in full control of the house the entire time. You can sell it, you can refinance it, you can rent it out. Or you can change who inherits it if you want to. Also, your kids don't have any claim to it while you are alive, which is important. Then the minute you pass away, the house transfers directly to whoever you named with no probate court involved at all. This is one of the best strategies in my opinion, because you don't need an attorney, you don't need a trust, and you don't have to retitle anything. You just have to file a new deed. It's still in your name, but the deed shows who receives it at your death. So for someone whose house is basically their only major asset and whose family situation is very straightforward, this one form is enough to keep their family out of probate court entirely for the home. Now, if you also have retirement accounts, investment accounts, or you've got kids with complicated situations like divorces and lawsuits or special needs, then the revocable living trust I just walked you through is going to do a lot more for you. Than a Transfer on Death Deed. But the Transfer on Death Deed, it only handles the house. Remember that. Everything else still goes through probate unless it's covered by some other strategy. Not every state allows Transfer on Death Deeds. Alabama, where I am, does not. So you'll need to check your specific state before you head down that route. And by the way, if you want me to walk you through how to use these strategies together to build a complete plan that protects your family from probate court without hiring a lawyer, I run a free live workshop where I'm going to walk through the whole process from start to finish. And the link to register for that workshop is at the top of the description below. So anyway, let's keep going. Strategy number 3, beneficiary designations on retirement accounts and life insurance. And this third strategy is one that almost everyone, every one of you is probably already using. Which is naming beneficiaries on your retirement accounts and your life insurance policies. Any account where you fill out a beneficiary form, things like your 401 from work, your IRA, your pension, or your life insurance, that gets to skip probate entirely because the money goes directly to the person that you named. That's true even if your will says something completely different or your trust says something different. The beneficiary form on the account is what controls. The danger with this strategy is that the way you fill out the form can create huge tax problems for whoever gets that money. If you name your trust as the beneficiary the wrong way, your kids can be forced to drain the account within a few years of your death, and they would have to pay significant income taxes on every dollar they pay out. If you name an individual person as the beneficiary instead, The money goes directly to that person with no protection wrapped around the money. So if they get sued for whatever reason, they go through a divorce, or they get into a debt situation, the inheritance that you left them can get pulled into any of those situations and taken from them. Now, with that said, before you fill out a single beneficiary form, sit down with your estate planning attorney and your financial advisor if you have one. At the same time. Once you name the wrong beneficiary or you fill out the form incorrectly, your kids are stuck with whatever the IRS rules say happens next. And there's no going back to fix it after you're gone. All right, let's go to 4. Strategy 4 is payable on death and transfer on death accounts. And this 4th strategy is what I call the cleanup strategy. And it's the bank and brokerage version of what we just covered. It's called a payable-on-death or transfer-on-death account. A payable-on-death account would be a regular checking or savings account where you fill out a free form at the bank naming who gets the money when you die. A transfer-on-death account, it's the same idea, just for brokerage accounts holding stocks and investments. The reason I call these the cleanup strategy is because of what I've watched happen with families over the years. Someone sets up a trust, they fund their main accounts to the trust, they do everything right, and then they pass away and the family finds an old savings account from 2003, you know, with $8,000 in it that nobody ever moved into the trust. And that one account ends up holding the entire estate up in probate court for months because it was not covered in the trust. I see this time after time. I saw it a few weeks ago with a gentleman who had literally 23 different bank accounts. A couple of those bank accounts did not have payable-on-death beneficiaries on them. They were joint accounts between he and his wife, but at the second death, which I think was the wife, then those accounts that did not have payable-on-death beneficiaries They go to the estate, and when they go to the estate, that means it's going to have to go through probate court. So those two accounts were the only things that went through probate court. So payable-on-death designations would've solved those issues. Now, what a payable-on-death designation does, it solves that problem in about 5 minutes. You just walk into the bank, you ask for the form, you name who's going to get the money, and that account is now protected from probate forever. You can keep using it exactly the way you do now, but the minute you pass away, the money is going to go directly to whomever you named. So one thing I want to mention is that if you already have payable-on-death designations on your old accounts, go look at them right now. This is your wake-up call. Do it right now because I've had clients pass away and their money went to an ex-spouse from 20 years ago because the form was never updated after they divorced. And the bank is not going to remind you of that. That's why this strategy is so great. It's free. It pairs with any of the other 4 and it covers the accounts that you might forget about or that do not fit into your trust for whatever reason. And then strategy 5 is just gifting, lifetime gifting. It's the giving away of assets while you are alive so they're not in your estate when you die. The IRS lets you give a certain amount of money to each person every year without any gift tax paperwork at all. And that number gets adjusted for inflation every year. Right now, I believe this year it's $19,000 per person, which means that you can give $19,000 to each of your kids, to your grandkids, to your nieces, or anyone else that you want to without filling out a single piece of paperwork. Now, when you move above that limit, you can still gift, you know, those larger amounts, but they begin to count against your lifetime estate tax exemption, which is huge right now. What makes this strategy work is that anything you give during your lifetime is not going to be in your estate when you die. So there's nothing for the probate court to deal with. So for a married couple gifting to two kids and to their spouses, That's $152,000 a year you can move out of your estate completely tax-free. And over 10 or 20 years, that adds up to a lot of money that your family does not have to wait on. But there's one big warning with this strategy you need to know about. Do not gift your house or any major appreciated asset to your kids while you are alive. The reason that this backfires comes down to how taxes work. When your kids inherit something versus when you give it to them while you're alive. When your kids inherit your house from you after you pass, the IRS treats them as if they paid whatever the house was worth on the day you died. So if you bought your house for $50,000 back in the '80s and now it's worth $400,000 and then you die, the IRS treats your kids as if they paid $400,000 for it. If they sell it the next day for $400,000, they owe literally nothing in capital gains tax because there's no profit to tax. But if you gift them the house while you're alive, the IRS does not do it that way. They treat your kids as if they paid the original $50,000 that you paid for it. So in that situation, when they sell it for $400,000, they're going to owe taxes on the entire $350,000 difference, which can be tens of thousands of dollars that they did not expect to pay. That's why this strategy is really only meant for cash, smaller investments, or anything that hasn't gone up much in value over the years. So for the house itself, keep it in the trust or use the transfer on death deed like we talked about earlier. Now, if you've watched this far, And you're still not sure which combination of these strategies makes sense for your family, then click the first link in the description below to register for my free live workshop, because you'll walk away knowing exactly what a complete estate plan looks like, how to verify your estate plan, make sure it actually protects your family, and how to set the whole thing up in 30 to 60 days without paying a big amount of money to a lawyer. So again, just click the link in the description to register. And if you want to learn how to actually fund a trust the right way, then make sure to watch this video next. See ya.
