TODI to avoid probate
Hi Terry!
We live in Illinois and would like to know if it’s possible to avoid probate if all accounts are beneficiary accounts or payable on death and we file a Transfer on Death Instrument for our home.
We are looking for a way to avoid probate and also setting up a trust.
Thank you!
Terry Says
I don’t know why you want to avoid setting up a Revocable Living Trust. An attorney can do that for you easily. It solves a few problems: What if you are ill and intensive care, or have an accident that puts you there? If you are unable to act, the successor trustee you name is empowered to do things like withdraw money from bank accounts named in the trust to pay for things you need. Or in the worst case, to sell your house if you linger on and cannot ever go home.
“Beneficiary accounts” — things like IRAs, 40l(k)s, and life insurance policies do NOT go through probate. And they are automatically distributed to your named beneficiary at your death. (And those beneficiaries should be instructed to “stretch out” the payments as long as possible to keep the money growing tax deferred.)
But there are a lot of things that can come up between life and death — and a Revocable Living Trust covers those issues.
