Legal Definitions - will substitutes

Will substitutes are legal documents that function similarly to a will. They allow the designated beneficiary to receive assets upon the death of the donor, but unlike a will, the beneficiary does not receive any benefits during the donor's lifetime. The main difference between a will and a will substitute is that the title of the asset is transferred to the beneficiary during the donor's lifetime, which means that the asset does not have to go through probate court.

• Revocable Living Trust: A trust is a common type of will substitute. The donor transfers ownership of their assets to the trust, and the designated beneficiary receives the assets upon the donor's death. The donor can change or revoke the trust at any time during their lifetime.
• Payable-on-Death (POD) Accounts: A POD account is a bank account that designates a beneficiary to receive the funds upon the account holder's death. The beneficiary has no access to the funds during the account holder's lifetime.
• Transfer-on-Death (TOD) Deeds: A TOD deed is a legal document that designates a beneficiary to receive a piece of real estate upon the owner's death. The beneficiary has no ownership or access to the property during the owner's lifetime.

These examples illustrate how will substitutes work. In each case, the beneficiary receives the asset upon the donor's death, but does not have any ownership or access to the asset during the donor's lifetime. This allows the asset to avoid probate court and be transferred directly to the beneficiary.