An Example

Jody, a client of mine, came up and said she was very concerned about her IRA going through court. It was a large account, especially large for her. She didn’t want a lot of people knowing about it, and she knew that probate is a very public proceeding. She knows that it has a cost, and it can take a while, but for her, it was more of a privacy thing, and I had great news for her if you have a beneficiary designation on an account, like an IRA, or life insurance, like bank accounts or savings accounts, those types of money market accounts or if there is a pay on death beneficiary, then you’ve created a private agreement.

Private Agreements

Private agreements include mortgages, leases, and trusts. Private agreements don’t need a judge’s help; they can just do it. So, if you have eight counts and you’re able to list an adult, that’s very important, it does not include a child. It will get there if you name a minor child, but it’s going to get there through court; we’re talking about avoiding court. If you list an adult, who is competent and who has the capacity to sign contracts, that will avoid probate.


Be careful of a couple of things. Do you trust that person? If something happens to that person, what should happen to your private agreement? Next, you can’t do these types of robust planning techniques with death beneficiaries, but you can do simple ones, I want it to go to my adult kids, I want it to go to my spouse, etc. Sometimes you can name charities. Another thing that’s not subject to probate is something with maybe us something that is going to be under a combined value of $75,000.

Estate Size

It is possible for your estate to be too small to need probate, so take the assets that would go through probate take things that are not in a trust. We’ve talked about trust before, and I’ll talk about them again, so don’t worry. Take things that do not have beneficiary designations. Take these types of assets that are not governed by private agreements; add them up. Add what’s the value if the combined value is less than $75,000, no probate. I have had people come in before and say all my accounts have beneficiaries. I leased my car. I rent my house. I just want to make sure my $10,000 bank account goes where it needs to go. Well, guess what, that’s not going to go to court, because all this person has is a $10,000 account it’s well under $75,000. No worries there, 75,000 is your grace. Anything under that and you can get something controlled by a private agreement that also is not going to go through probate as long as you’re naming a competent, adult.