When your goal is avoiding probate, there are three categories of property, and only one requires probate, so it can be accessed when the owner passes away, says njmoneyhelp.com’s recent article entitled “How can we avoid probate for this account?”
First, it’s important to understand that property that passes by operation of law is any asset that’s owned jointly with right of survivorship. These accounts are sometimes labeled as “JTWROS.”
When one co-owner dies, the property passes by law to the surviving co-owner. This is a way of avoiding probate.
Married couples in Florida have a similar ownership known as tenancy by the entireties. It also has a right of survivorship.
A second category is contract property, which includes life insurance, retirement accounts and any non-retirement accounts that have beneficiaries designated upon death.
These designations supersede or “override” a will and are also a means of avoiding probate, directly passing to the named beneficiary.
These are frequently designated as “POD” (payable on death) or “TOD” (transfer on death).
The third category is everything else. This includes accounts that are owned solely by the person who died with no POD or TOD designation and is usually subject to probate.
A certificate of deposit is a time deposit. It’s a financial product commonly available from banks, thrift institutions and credit unions. Certificates of deposit are different from savings accounts because a CD has a specific, fixed term and usually, a fixed interest rate.
To avoid probate to access a CD or any other account owned by a spouse’s name, you can either make the account jointly owned by husband and wife with right of survivorship. or designate your spouse as a beneficiary upon death.
Either option will succeed in avoiding probate to access that particular account, like a certificate of deposit.
Reference: njmoneyhelp.com (June 6, 2019) “How can we avoid probate for this account?”