A son called my office recently from his late mother’s apartment in Manhattan. He held her will, a document she had carefully prepared, which left everything to him and his sister equally. But he was confused. Her largest asset, a significant investment account, was not going to be distributed according to that will. Instead, the entire account passed directly to his sister. The reason was a simple Transfer-on-Death (TOD) designation she had signed years ago, a contractual agreement that superseded the will entirely.
This family’s experience illustrates a critical point I discuss with every client: a will controls only what passes through probate. Many assets—often the most valuable ones—are not subject to the delays and public scrutiny of Surrogate’s Court. Understanding this distinction is fundamental to planning. It is the difference between a legacy administered privately and one tied up in court for months, or even years.
Assets That Pass by Operation of Law
The most common way to avoid probate is by titling assets in a way that directs their transfer upon death automatically. These transfers happen “by operation of law,” meaning the legal framework for the transfer is built into the ownership structure itself, independent of a will or the court system.
Joint Ownership with Right of Survivorship
When you own property with another person as “joint tenants with right of survivorship,” you create a legal partnership. Upon the death of one owner, their share automatically and immediately passes to the surviving joint owner(s). This is a powerful tool for married couples, who often own their homes as “tenants by the entirety”—a special form of joint ownership with similar survivorship rights.
Bank accounts, brokerage accounts, and real estate can all be held this way. The key is the exact wording on the deed or account agreement. Without the specific “right of survivorship” language, the default ownership may be “tenants in common,” where each owner’s share does pass through their probate estate. This is a small but critical distinction that determines whether an asset is subject to court oversight.
Beneficiary Designations
Like the family I mentioned earlier, many people are surprised to learn that beneficiary designations on accounts like life insurance policies, IRAs, 401(k)s, and annuities are legally binding contracts. These contracts dictate who receives the asset upon your death, and they take precedence over any instructions in your will.
Payable-on-Death (POD) bank accounts and Transfer-on-Death (TOD) brokerage accounts function the same way. These are simple, effective tools for passing specific financial assets directly to a named individual without probate. However, they require diligent stewardship. It is crucial to review these designations every few years—especially after major life events like marriage, divorce, or the birth of a child—to ensure they still reflect your wishes.
The Deliberate Path: Using a Revocable Living Trust
While joint ownership and beneficiary designations are effective for specific assets, the creation of a revocable living trust is a more intentional way to avoid probate for an entire estate. A trust is a private legal entity that you create to hold title to your assets. You transfer your property—your home, investments, bank accounts—into the name of the trust during your lifetime. You still control everything as the trustee, but legally, the trust owns the assets.
When you pass away, the assets held by the trust are not part of your personal estate and therefore do not require probate. Your chosen successor trustee—often a trusted family member, friend, or corporate fiduciary—steps in to manage and distribute the trust assets according to the private instructions you laid out in the trust document. This process is confidential, efficient, and avoids the costs and delays of Surrogate’s Court.
Creating and funding a trust is an intentional act of planning. It’s a declaration that you, not a court, will control the disposition of your life’s work. Stewardship.
The Small Estate Exception in New York
What if no probate avoidance planning was done? New York law provides a limited exception for modest estates, recognizing that a formal probate process can be impractical and costly for smaller sums.
For these situations, Article 13 of the Surrogate’s Court Procedure Act (SCPA) establishes a simplified procedure known as “Voluntary Administration.” If a person passes away with personal property—that is, anything other than real estate—valued at less than $50,000, their family can file a simple affidavit with the court to collect and distribute the assets. This process is faster and less expensive than a formal probate proceeding, but it is strictly limited to estates that fall below the statutory threshold and do not include real property.
Probate is the legal default, but it does not have to be the automatic outcome for your estate. Through prudent planning and the proper use of legal tools, your assets can pass to the next generation with the privacy and efficiency you intend.
The first step is often the simplest: a clear inventory of your assets and a review of how each is currently titled. We typically begin by scheduling a meeting to audit deeds, account statements, and beneficiary forms to create a clear picture of which assets would—and would not—be subject to court oversight.
