Probate is the public, court-supervised process of distributing a decedent's probate assets — and for many families it is an expense and delay they could have avoided entirely. The good news is that almost every asset that would otherwise pass through probate can be re-titled or designated to pass directly to beneficiaries, often at minimal cost. A typical American household can implement at least three of the strategies below without hiring an attorney, and a fully planned estate can reduce probate assets to a sum small enough to qualify for a small-estate affidavit. This article walks through six of the most common probate-avoidance tools, how they work, and the trade-offs of each.
The revocable living trust
A revocable living trust is a legal entity you create during your lifetime to hold title to your assets. You (the grantor) typically serve as the initial trustee, retaining full control to buy, sell, invest, and even revoke the trust entirely. Because the trust does not die when you do, assets titled in its name are not subject to probate — they pass to your named beneficiaries according to the terms of the trust document, administered by a successor trustee you have appointed. For a married couple, a joint revocable trust can hold both spouses' assets and provide for seamless management if either becomes incapacitated.
The trust must be "funded" — that is, assets must be re-titled into the trust's name. A trust that is signed but never funded is essentially worthless for probate avoidance, a fact that catches many families by surprise when they discover the decedent's house and brokerage accounts were still held in individual name. Funding typically requires recording a new deed for real property, transferring brokerage and bank accounts, and assigning tangible personal property through a general assignment document. The cost of establishing a revocable living trust ranges from about $1,500 for a simple individual trust to $3,500 to $5,000 for a married couple with taxable-estate planning provisions.
A revocable trust does not reduce income taxes (the grantor continues to report income on Form 1040) and does not shield assets from creditors. Its principal benefits are probate avoidance, privacy (the trust document is not a public record), and continuity of management during incapacity. For estates that may approach the federal exemption, the trust can be paired with credit-shelter provisions to use both spouses' exemptions — but that planning is increasingly done through portability instead.
Payable-on-Death bank accounts
A Payable-on-Death (POD) designation is the simplest probate-avoidance tool available for bank accounts and certificates of deposit. The account owner names one or more beneficiaries on a form provided by the bank; during life, the owner retains complete control and the beneficiaries have no rights to the funds. On the owner's death, the beneficiary presents a certified death certificate and the funds are released directly, outside probate. Federal law authorizes POD accounts at every FDIC-insured institution, and they are recognized in all 50 states.
POD accounts are especially useful for families who want to leave a modest sum to a specific person without drafting a trust. They are also a useful tool for liquidity: naming a trusted beneficiary on an account can give them quick cash to pay funeral expenses and immediate bills while the rest of the estate is tied up in probate. The one caution is that POD designations do not override a contrary provision in the will — a beneficiary who is disinherited in the will but still listed on the POD form will receive the funds, a discrepancy that produces a significant share of estate disputes.
Transfer-on-Death brokerage and deeds
Brokerage firms uniformly offer Transfer-on-Death (TOD) registration for individual and joint taxable accounts, which works exactly like a POD designation for bank accounts. Beneficiaries are named on the account paperwork, and the assets pass outside probate on the owner's death. Most major brokerages — Vanguard, Fidelity, Charles Schwab, and Merrill Edge among them — allow TOD registration online or through a simple form.
For real estate, the TOD deed is a relatively recent and powerful tool. A TOD deed allows an owner to record a beneficiary designation on real property while retaining full ownership and the right to revoke during life. The deed is recorded with the county, takes effect automatically at death, and the beneficiary receives the property by recording a death certificate — no probate required. TOD deeds are currently authorized in more than 30 states, including California (Civil Code § 5642), Texas (Estates Code Chapter 114), Florida, Illinois, Ohio, and Virginia. Notably, New York has not enacted a TOD deed statute, and residents there must use a trust or joint tenancy to avoid probate on real property.
Joint tenancy with right of survivorship
Joint tenancy with right of survivorship (JTWROS) is the default ownership form for most married couples' homes and bank accounts. When one joint tenant dies, the entire property passes automatically to the surviving joint tenant by operation of law — no probate, no deed, no court involvement. The survivor typically records an affidavit of survivorship and a certified death certificate to clear title.
JTWROS is simple and free, but it has meaningful limitations. First, it only delays probate until the second death — when the surviving spouse dies, the entire asset is in his or her estate and probate will be required. Second, joint tenancy exposes the asset to the creditors of every joint tenant, which is why adding an adult child as a joint tenant is usually poor planning. Third, joint tenancy can create gift-tax issues: adding a non-spouse as joint tenant is treated as a gift of half the property's value at the time of the addition. For married couples, JTWROS is generally fine; for transfers to children, a trust or TOD deed is almost always preferable.
Retirement accounts and life insurance
Assets that pass by beneficiary designation — IRAs, 401(k)s, pensions, annuities, and life insurance — are inherently non-probate assets. The beneficiary form controls, regardless of what the will says. The single most important step in any estate plan is reviewing beneficiary designations every two to three years and after every major life event (marriage, divorce, birth, death of a named beneficiary).
The SECURE Act of 2019 changed the rules for inherited retirement accounts dramatically. Most non-spouse beneficiaries must now empty an inherited IRA within 10 years of the original owner's death, eliminating the old "stretch IRA" over a beneficiary's life expectancy. Exceptions apply to surviving spouses, minor children of the account owner, disabled or chronically ill individuals, and beneficiaries less than 10 years younger than the decedent. Failure to designate a beneficiary causes retirement accounts to default to the estate — which both forces them through probate and accelerates the income tax bill.
Lifetime gifts and the annual exclusion
Gifts made during life are not probate assets because the donor no longer owns them at death. The federal annual gift exclusion for 2025 is $19,000 per recipient, meaning you can give up to $19,000 to as many individuals as you wish each year without filing a gift tax return and without using any of your lifetime exemption. A married couple can jointly give $38,000 per recipient by splitting gifts (Form 709). Tuition paid directly to a school and medical expenses paid directly to a provider are also excluded from gift tax, regardless of amount, under IRC § 2503(e).
Lifetime gifts above the annual exclusion count against the donor's lifetime gift and estate tax exemption — $13.99 million per individual in 2025 — but do not generate any actual tax until the exemption is exhausted. The exemption is scheduled to sunset on December 31, 2025, dropping to roughly $7 million per person adjusted for inflation, which makes strategic gifting in 2025 especially relevant for high-net-worth families. For a deeper look at the exemption, portability, and Form 706, see our federal estate tax guide.
For most families, the right strategy is a combination: a revocable living trust for the house and brokerage accounts, POD and TOD designations for banks and taxable investments, beneficiary designations kept current on retirement accounts and life insurance, and modest annual gifts to family members where appropriate. To estimate what your probate might cost if you skip these steps, try our probate fee calculator.
Last reviewed July 3, 2026. This article is informational and does not constitute legal, tax, or financial advice. Consult a qualified professional for guidance specific to your situation.