Most people, if asked, would prefer to avoid the expense and time delay of having their estate probated. According to a national survey, sixteen months is the average length of time involved between a person's death and completion of all paperwork required to conclude the probate process. Some of these delays occur in order to analyze various tax savings opportunities, and to gather information on current assets and outstanding liabilities, and may occur whether probate is required or whether non-probate techniques are used to transfer assets after death. Other delays occur due to notices and mandatory waiting periods required under probate statute and can be avoided through estate planning.

Although avoiding probate is generally less expensive than probate, avoiding probate does not necessarily avoid all fees. Expense is involved in gathering asset information, paying debts and expenses, tax planning and filings, distribution of assets, and other activity regardless of whether probate is required or not. However, utilizing probate avoidance techniques does avoid requirements of signed waivers from heirs, various notices and waiting periods, paperwork required to be filed with the court, and potential court hearings. In many cases, use of probate avoidance techniques is advantageous to minimize expense, but also to implement tax planning methods, prepare for management in the event of incapacity, and to coordinate titling and beneficiary designations on assets so your wishes are carried out.

Various methods of avoiding probate exist. Probate takes place when the last legal owner of property dies. If a joint owner or beneficiary exists for an asset, the asset avoids probate.

Examples of situations where a joint owner or beneficiary exists if one legal owner dies are:

1. Ownership in joint tenancy with right of survivorship. Upon the death of one joint tenant, the surviving joint tenant remains the legal owner, and probate is not required. Probate will be required upon the death of the last surviving joint tenant, since no other owner will survive. (See above illustration.)

2. Life insurance with a named beneficiary. Upon the death of the insured, the surviving beneficiary is legal owner of the life insurance proceeds and probate is avoided. However, probate is NOT avoided if the insured's estate is listed as beneficiary or if the beneficiary is deceased. Therefore, it is very important to have a primary and a contingent beneficiary listed, so the proceeds are paid to the contingent beneficiary if the primary beneficiary is not available. Then the proceeds still avoid probate. Beneficiary designations may also be used on IRA's, annuities, and various other types of assets.

3. Accounts payable on death (P.O.D.) to another person upon death of the primary owner. These accounts work like a beneficiary designation in that ownership rights remain with the person whose name is on the account, and ownership rights are not transferred until the death of the owner. P.O.D. accounts should not be confused with Power of Attorney (P.O.A.) designations which allow another person to sign on the account but do not transfer ownership or avoid probate in the event of the owner's death. Transfer on Death (T.O.D.) accounts work in the same way as P.O.D. accounts, and typically apply to securities.

Although in some situations, all assets can be structured so they fall into the above categories to avoid probate; some issues exist with these methods of probate avoidance.

With joint tenancy, probate is avoided IF there is a survivor. If a husband and wife own all property as joint tenants and they are both killed (e.g., in a common accident), no joint tenant survives and the estate is probated. Even if a joint tenant survives, when the surviving joint tenant passes away, probate is required. Therefore, when husband and wife own property as joint tenants, when one is deceased, the survivor must do estate planning to avoid probate of his or her own estate. A period of grief is not a good time to be in need of estate planning.

Probate could be avoided by the surviving joint tenant by adding other joint tenants as owners of the property. This would avoid probate, since a surviving joint tenant would remain if one joint tenant died. However, most people prefer NOT to add other joint tenants upon the death of their spouse, since this is giving up part ownership in the property. This also makes the jointly held property subject to claims of the creditors of those added as joint tenants.