10. Non-Probate Transfers

Question 1

How may life insurance proceeds be distributed?

Answer 1

Beneficiaries named under life insurance contract

Question 2

How does a totten trust operate?

Answer 2

1) Testator deposits in bank in trust for Ben
2) Testator retains control of trust during lifetime
3) Trustee transfers upon Testator’s death

Question 3

How does a joint/survivor account operate?

Answer 3

Money goes to survivor
- Unless evidence re joint account is merely set up as convenience for paying Depositer’s bills + no gift intended to survivor (many states)

Creditors can reach money

• To extent Testator deposited if other estate is not sufficient to satisfy claims (UPC)
• No survivorship intended/Account opened for Testator’s inconvenience (Common law)

Question 4

Are payable on death designations effective?

Answer 4

Effective (by statute)

Not effective (many states)

Question 5

How does a deed operate?

Answer 5

Deposited in escrow (delivery condition upon Grantor’s death)

Delivered to Grantee (present transfer of future interest subject to life estate in Grantor)

Question 6

How does joint tenancy operate?

Answer 6

Right of survivorship

Question 7

How does inter vivos trust/gift operate?

Answer 7

Transfer gift during Testator’s lifetime (not death)

Question 8

What are the advantages of non-probate transfers?

Answer 8

Avoid taxes

Eliminate probate costs + inconvenience