Final wishes stated in a simple will are admitted to probate at your death. However, all asset transfers are not subject to probate. An IRA is not part of the assets that transfer through probate.

If you have an individual retirement account (IRA) and you name a beneficiary, the beneficiary will assume ownership of your account after presenting a valid original death certificate. That IRA would not be a part of your Probate estate.

Beneficiaries of an IRA must take yearly mandatory minimum distributions. Additionally, they are forced to take all the assets out of the account within 10 years of the date of your death. The probate court has no involvement in the transfers to the beneficiary.

When it comes to taxation, transfers from a Roth individual retirement account are tax-free, and traditional account distributions are taxable.

Proactive Probate Avoidance

Although probate serves a purpose, there are several negatives to the probate process.

Lack of Privacy: Probate records are available to anyone that is interested. This can be disconcerting in a general sense, and the information can potentially cause hard feelings among heirs.
Expenses: The expenses that accumulate during probate can significantly reduce the value of the estate.
Time: Probate will take eight or nine months at minimum in most jurisdictions.
Court Approval: The court must approve of all asset distributions at the end of the probate case.

A revocable living trust will avoid probate. You don’t have to be concerned about a loss of control, because you would act as the trustee while you are living, and you retain the right revocation.

After your passing, the successor trustee that you name in the document would distribute assets to the beneficiaries outside of probate. You can protect the assets from the beneficiaries’ creditors, and you can provide beneficiaries limited distributions over time.

Learn More About Estate Planning!

Learn more about estate planning! Come back and visit this blog and all of the other resources on this site. We frequently update with fresh information. Also, you can make an appointment with one of our estate planning professionals, free of charge.

Our firm has compiled a robust library of special reports that cover important estate planning and elder care topics. Please feel free to access the reports that interest you. These reports are offered free of charge.

Head over to our special reports library to access any or all of the reports right now.

Need Help Now?

If you are ready to work with a Fayetteville, Arkansas estate planning attorney to put a plan in place, we are here to help. You can send us a message to request a free consultation appointment or we can be reached by phone at 479-443-0062.