Probate is the legal process of wrapping up a person's affairs, paying their bills, and distributing their assets. And it is not uncommon for this to take several months to go through the court system. The expenses involved can potentially include property appraisal, executor fees, court costs, plus legal and accounting fees. The amount varies depending on your state and the local practice in your community.

To avoid this burden on their loved ones, seniors frequently transfer assets into joint-tenancy ownership with their intended beneficiaries. Although this strategy can reduce settlement costs by eliminating probate, it could open up another set of problems.

Assets held in joint-tenancy automatically go to the surviving owner when you die. However, while you are alive, the joint owner can legally withdraw part or all of the money in the account without your permission. In addition, if he or she gets into financial or legal trouble, the property could be at risk to creditor claims.

Rather than making a beneficiary a joint owner of your property to simply avoid probate, you might consider another idea.

An individual can own certain assets and list a beneficiary. At the owner’s death, the assets pass to the named beneficiary and avoid probate. While you are alive, your beneficiary does not have access to your account. You can change beneficiaries at anytime, and you might even be allowed to name a contingent beneficiary.

A Payable on Death (P.O.D.) registration applies to bank, savings and loan, and credit union accounts, as well as United States savings bonds. On the other hand, a Transfer on Death (T.O.D.) registration is used for securities such as stocks, bonds, and mutual funds (but only if the securities firm allows it). With both of the above, the beneficiary receives the funds by offering proof of identity and a copy of your death certificate, regardless of the provisions in your will. Please note that the assets will still be included in your estate when you pass away. Estates that exceed $2 million are subject to federal estate taxes.