Ways to Avoid Probate in Kansas

One of the first things we hear when meeting with a new estate planning client is “How can I avoid probate?”  This is often a driving factor for people coming to our office.  What many people don’t know is that there are a number of ways to avoid probate.

Probate is a court supervised process to disburse a person’s assets after they die.  Probate can be expensive and may take months to complete, which can be quite trying on the executor. Often individuals we meet with have had to deal with the probate process for a loved one and would prefer not to have their family deal with a probate after their death. 

There are a number of different tools in Kansas that can be used to transfer property to your chosen beneficiaries outside of probate.  The following are some of the most common tools used to avoid probate.

Property Held Jointly with Rights of Survivorship:

Joint tenancy with rights of survivorship is a type of ownership in which two or more people own an equal interest in an asset. If one of the owners dies, their share of the asset passes automatically to the surviving owner or owners, without going through probate. Good examples of a joint tenancy assets is a financial account or bank account. 

In addition, real estate in Kansas can be held in joint tenancy with rights of survivorship.  Frequently we encounter situations where the parties think a previous deed creates joint tenancy with rights of survivorship between the owners (usually spouses) but the deed does not contain the appropriate language and instead creates tenancy in common, which then requires a probate proceeding.

We recommend that everyone verify the ownership status of their bank accounts and real estate to make sure that the ownership is as intended.  Failure to do so could result in probate being needed when the parties think it will not be needed. 

Payable on Death Designations:

Payable on death (POD) is a contract that an account owner makes with a financial institution to designate beneficiaries to their bank or other financial accounts. If you have a POD designation, you designate a beneficiary who will inherit any money in the account after your death. This arrangement avoids having to probate these assets as they are transferred to the listed beneficiary by contract.  A POD can be a simple way of transferring assets and avoiding probate.

We find that some of our clients confuse POD with adding a child or other relative to their accounts as owners. If a person is added to your account as an owner, that person usually has authority to withdraw assets from your accounts while you are still alive.

Again, we recommend that everyone verify that all their accounts have a POD designation on them.  We have often had to probate an estate where someone failed to verify that every account had such a designation therefore leaving one assets to be probated. 

Transfer on Death Deeds:

A Transfer on Death Deed (TOD deed) is a legal document that allows you to designate a beneficiary who will automatically become the owner of your real estate when you pass away. It works by specifying one or more individuals or organizations (such as a charity) as beneficiaries in the TOD deed. The TOD deed is then filed with the register of deeds office in the county where the real property is located. When you die, the designated beneficiary automatically inherits the property without the need for probate upon filing a copy of the owner or owners death certificates with the Register of Deeds office.

Married couples can also create TOD deeds. In this case, the beneficiary does not acquire the property until the second spouse passes away. However, the surviving spouse has the ability to revoke the TOD deed before that time.

TOD Deeds do not convey any interest in the property to be the beneficiary until your death and they do not create any limits on your ownership.  You are still free to sell or mortgage the property during your life.  However, if you move after completing your estate planning you will need to have another TOD Deed drafted and filed for your new property.

Small Estate Affidavit:

Kansas provides that for Estates of less than $75,000.00 (a recent increase from $40,000.00) that does not include real estate to transfer the property directly to the heirs with a Small Estate Affidavit.  This Affidavit allows for smaller estates that would not be cost effective to probate to be transferred.  The heirs just need to complete the affidavit form that is provided by the Kansas Judicial Council and provide that to the institution that is holding the funds.  The institution then provides the funds as indicated in the Affidavit. 

Revocable Trusts:

Revocable Trust are popular estate planning tools. They contain your estate plan including who your beneficiaries are. As a separate legal entity, they do not die when you do.  The court does not need to be involved with administering a revocable trust. After you create a revocable trust, you can transfer assets into it. These assets are then exempt from the probate process, which simplifies estate administration and ensures a smoother transition for your named beneficiaries.  Not everyone needs a Trust as many individuals, by using the tools listed above, can reach the same outcome without the added costs of a Trust. 

Conclusion:

Kansas has provided numerous methods by which an individual can avoid probate as detailed herein, however there are also several pitfalls if these tools are not used properly.  Therefore, it is very important to meet with an Estate Planning Attorney to make sure that the probate process can be avoided based upon your special circumstances.  The attorneys at Minter & Pollak, LC provide free consultations for any estate planning client and hope you reach out to us today at 316-265-0797 to set up a time to discuss your options.