Monument Wealth Management Articles
How to Avoid Probate for Parents: A Guide for the Sandwich Generation
Share on your favorite platform, or by email
We dug into avoiding probate for parents and much more on a recent podcast episode of OFF THE WALL with our guest, Catherine F. Schott Murray, Shareholder and Trust and Estate Attorney at Odin Feldman Pittleman. To listen to the full episode, click here.
If you’re part of the sandwich generation—balancing raising your own family while caring for aging parents—you’re already juggling a lot. One critical way you can support your parents is by helping them avoid probate. Probate, the court-supervised process of settling an estate, can be expensive, time-consuming, and emotionally draining.
The good news? There are effective strategies to ensure your parents’ assets pass seamlessly to you and their loved ones without court involvement. With some careful planning, you can help them protect their legacy and spare the family unnecessary stress during an already stressful time.
What is Probate, and Why Do You Want to Avoid it?
Probate is the legal process of settling someone’s estate when they pass away. It involves verifying their will, paying debts, and distributing assets under court oversight. While it’s designed to protect heirs, probate comes with significant drawbacks:
- Time Delays: The process can take 6-12 months—or even years for complex estates.
- High Costs: Legal fees, executor expenses, and probate taxes quickly add up.
- Loss of Privacy: Probate is a public process, so family assets and beneficiaries become part of the court record.
Helping your parents avoid probate isn’t just about saving money. It’s about saving time and reducing the stress that comes with legal red tape. There are a variety of things that can trigger probate, so here are some ways to help avoid it.
#1: Set up a Living Revocable Trust for Your Parents
A revocable living trust is one of the most effective tools to avoid probate for parents. Unlike a will, a trust established and funded during life allows assets to transfer directly to beneficiaries without court intervention.
How it Works:
- Your parents (the grantors) create the trust and transfer ownership of their assets—like the family home, bank accounts, and investments—into the trust.
- They serve as trustees during their lifetime, maintaining control of the assets.
- When they pass away or become incapacitated, a successor trustee (such as you) takes over and distributes assets according to their wishes.
Why It’s Essential:
Assets held in a trust are not subject to probate. Catherine Schott Murray emphasized the critical step of funding the trust: “Creating a trust is step one. But if you don’t transfer your parents’ assets—like real estate or accounts—into the trust, those assets still go through probate.”
How You Can Help:
- Sit down with your parents to list their assets.
- Work with their estate attorney and financial advisor to ensure the trust is properly funded and aligned with their wishes.
#2: Update Beneficiary Designations of Financial Accounts
Some of your parents’ key assets—like retirement accounts, life insurance policies, and bank accounts—allow for beneficiary designations. By naming beneficiaries, these assets bypass probate and transfer directly to the designated individuals.
Accounts to Check:
- 401(k)s, IRAs, and other retirement accounts.
- Life insurance policies.
- Bank and investment accounts (using Transfer on Death (TOD) or Payable on Death (POD) designations).
Why It’s Important: Beneficiary designations are simple to set up but easy to overlook. Outdated beneficiaries (e.g., an ex-spouse or someone who has passed away) can create confusion and delays.
How You Can Help:
- Help your parents review their accounts annually and ensure beneficiary names and percentages are accurate.
- Encourage them to name contingent beneficiaries as a backup.
- Beneficiary designations are one of the easiest ways to avoid probate for parents. Just make sure they align with the overall estate plan.
#3: Use a Transfer on Death (TOD) Deed for Real Estate
If your parents own their home or other real estate, consider using a Transfer on Death (TOD) deed. This tool allows property to pass directly to a named beneficiary when the owner passes away—no probate required.
Why It’s Better Than Joint Ownership:
- Adding you or a sibling to the property title may seem simple, but it can trigger unintended gift consequences.
- Joint ownership exposes the property to the co-owner’s creditors or lawsuits.
Catherine explained that a TOD deed is a much cleaner option for passing real estate, as it avoids probate without creating tax or liability risks.
How You Can Help:
- Check if your parents’ state allows TOD deeds.
- Work with an attorney to draft and file the deed properly.
#4: Consolidate Your Parents’ Financial Accounts
As your parents age, it’s common for financial accounts to become scattered across multiple banks and institutions. This increases the risk of overlooked assets that could end up in probate.
How You Can Help:
- Make a list of all their financial accounts, including old pensions or savings plans.
- Help consolidate accounts into a trusted institution for easier management.
- Ensure assets are properly titled and aligned with their estate plan (e.g., owned by a trust or have beneficiary designations).
Catherine highlighted the need for regular reviews, estate plans are not set-it-and-forget-it. “I tell clients to revisit their plans every 5 to 10 years or after major life changes,” she said.
#5: Protect Your Parents from Financial Exploitation
Unfortunately, seniors are prime targets for financial scams and exploitation. You can play a crucial role in helping your parents safeguard their assets.
Steps You Can Take:
- Set up alerts on their bank accounts for large or unusual transactions.
- apps or tools to block spam calls and whitelist trusted numbers.
- Ensure their financial institutions have a trusted contact (like you) who can be notified if something seems suspicious.
Scammers move at the speed of light so it’s important to stay on top of the latest safeguards. The more involved you are in your parents’ finances, the easier it is to spot and stop exploitation.
Why Helping Your Parents Avoid Probate is a Gift
Taking steps now to help your parents avoid probate can make a world of difference. By creating a trust, updating beneficiaries, and ensuring assets are titled correctly, you’re giving your family:
Peace of Mind: Your parents’ wishes will be honored, and their estate will be easier to settle.
Time: Probate delays are eliminated, so you can focus on healing, not paperwork.
Savings: Reducing legal fees and taxes preserves more of your parents’ legacy.
Avoiding probate isn’t just about money. It’s about leaving a thoughtful legacy for your family—one of peace, clarity, and care.
Final Thoughts: Start the Conversation Now
Helping your aging parents plan for the future can be challenging, as it’s a difficult conversation to start. The easiest way to open the door is from the perspective of their goals and objectives.
- Start by asking them what they want for their future. These questions help you understand how they want their finances handled.
- Take small steps. Whether it’s encouraging them to create a trust, updating beneficiary designations, or consolidating accounts, every action moves you closer to protecting their legacy.
- Lean on your trusted team of advisors—like your wealth advisor, attorney, and accountant—to guide you through the process.
As Catherine F. Schott Murray wisely says, “Begin the begin. Once you begin, you are closer to the end than had you not begun at all.”
By planning ahead, you’re not only helping your parents, you’re also creating a smoother, less stressful future for yourself and your entire family.
Tune into the full podcast
See if we’re a fit
Jessica L. Gibbs, CFP®
Vice President & Partner
Jessica was inspired by a podcast to become a financial planner. At the time, she was working at the Brookings Institution as part of their fundraising team. Even though she enjoyed working with individuals on their philanthropic giving, Jessica decided that wealth management was a better way to build the type of long-term, advice-driven relationships she values. After completing Georgetown University’s Certificate in Financial Planning program....
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.
A copy of Monument’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com/disclosures. Please Note: Monument does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Monument’s website or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Monument account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Monument accounts; and, (3) a description of each comparative benchmark/index is available upon request.
Please Remember: If you are a Monument client, please contact Monument, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.