This article is part of the Biblically Informed Framework for Retirement Stewardship (BIFRS) series. It was originally written in November of 2022 and updated in May of 2026.

My wife and I recently assisted a widow in our church with some legal and financial issues after her husband’s passing. They had their affairs in order—a will and a living trust—yet there were still accounts requiring probate, and the process took multiple trips to the Clerk of the Superior Court, over a month of processing time, and considerable paperwork. It was instructive.

That experience prompted me to think: Will my wife have to walk through a similar process? And what can people do to spare their loved ones that burden?

Probate in North Carolina takes a minimum of four months, and fees can run $2,000 to $10,000 or more, depending on complexity. Most people, once they understand this, want to minimize how much of their estate must pass through probate—both for simplicity and to protect those they love from unnecessary delay and expense.

Option 1: Joint ownership of financial accounts

Joint ownership is the simplest probate-avoidance strategy for spouses. When one joint owner dies, the account passes automatically to the surviving owner without probate. Standard checking and savings accounts work this way when held jointly with right of survivorship.

One important limitation: retirement accounts such as 401(k)s and IRAs cannot be owned jointly. They must pass through designated beneficiaries—addressed in Option 3 below.

Option 2: Joint ownership of real Estate

Spouses typically own their home jointly, which means it passes automatically to the surviving spouse at death. Adding an adult child or other non-spouse beneficiary to the deed as a joint owner is more complicated and carries meaningful risks.

Adding a non-spouse to the deed may constitute a taxable gift. The 2026 annual gift tax exclusion is $19,000 per recipient (up from $18,000 in 2025)—so if the deemed gift value is below that threshold, no gift tax return is required. But if the property’s value exceeds $19,000, you may need to file a gift tax return and count the excess toward your lifetime exemption.

The capital gains issue is potentially more significant: if the beneficiary assumes ownership while you are still alive and subsequently sells the property, they owe capital gains taxes based on your original purchase price (cost basis), not the value at inheritance. By contrast, property inherited at death receives a “stepped-up” cost basis equal to its fair market value at the time of death, which dramatically reduces capital gains exposure. This is a powerful reason to avoid transferring real estate while alive when the purpose is estate planning rather than a genuine gift.

Option 3: Payable-on-Death (POD) accounts

Designating a beneficiary on any financial account—bank accounts, brokerage accounts, retirement accounts, life insurance, savings bonds—makes it a payable-on-death account. At death, the funds transfer directly to the named beneficiary without probate. This is simple, free, and highly effective.

Most institutions allow both primary and contingent (alternate) beneficiaries. A typical arrangement names a spouse as primary beneficiary and children as contingent beneficiaries. You can also name charitable organizations that meet IRS 501(c)(3) requirements as beneficiaries.

My wife is the designated beneficiary of my IRA accounts at Fidelity. Should I predecease her, she claims the assets directly from Fidelity, who will help her establish an Inherited IRA—which, under current rules, provides the most favorable tax treatment for a surviving spouse. Once she has taken possession, she can update her own beneficiary designations as she sees fit.

Option 4: Transfer-on-death (TOD) arrangements

Many states allow transfer-on-death vehicle registrations and TOD deeds for real estate, enabling these assets to pass directly to named beneficiaries without probate. North Carolina does not currently offer TOD deeds for real estate or TOD vehicle registrations. Residents of NC must rely on other strategies—joint ownership, trusts, or making real estate part of a will—to handle these assets.

If your state does offer TOD deeds, they function similarly to POD beneficiary designations: you name a beneficiary while you are alive, the deed is recorded with your county, and at your death the property transfers automatically. The beneficiary receives a stepped-up cost basis, avoiding the capital gains problem described under Option 2.

Option 5: Revocable living trust

Property held in a revocable living trust is not part of your probate estate. When you die, the trustee can transfer trust assets to beneficiaries quickly and privately, without court involvement. Trusts also offer more control over distribution—you can specify conditions (education, milestone birthdays, discretionary distributions) that a simple will cannot impose.

I had a living trust when my children were younger to manage guardianship and provide for them if my wife and I both died early. We dissolved it when we redid our wills, as our children are now grown. However, I am reconsidering this—particularly because our house and vehicles in North Carolina cannot pass via TOD, so they would need to be in a trust to avoid probate entirely.

Trusts have real upfront costs (attorney fees of $1,500 to $3,500 or more) and require the discipline to actually “fund” them by re-titling assets into the trust’s name. Unfunded trusts provide little benefit. But for those who want maximum control over distribution and the cleanest possible transition for heirs, a trust is often the right tool.

Option 6: Gifts during your lifetime

You cannot face probate on assets you no longer own. Giving property away during your lifetime removes it from your estate and eliminates any probate concern—though gift and estate tax rules apply.

In 2026, the annual gift tax exclusion is $19,000 per recipient. You can give up to $19,000 to any number of people each year without filing a gift tax return. Married couples can combine their exclusions, giving $38,000 per recipient annually. Amounts above the exclusion reduce your lifetime gift/estate exemption but are not immediately taxable.

The federal lifetime estate and gift tax exemption in 2026 is $15 million per person ($30 million per married couple), following the One Big Beautiful Bill Act signed on July 4, 2025. This is permanent and indexed for inflation going forward, eliminating the “use-it-or-lose-it” urgency that existed before the OBBBA. The 40% estate tax rate still applies to amounts above the exemption, though it affects only the wealthiest estates.

The Tax Cuts and Jobs Act of 2017 (TCJA) had temporarily doubled the federal estate tax exemption, which was scheduled to sunset at the end of 2025, reverting to roughly $7 million per person. The OBBBA (signed July 4, 2025) permanently increased the exemption to $15 million per individual / $30 million per married couple starting January 1, 2026, with annual inflation indexing thereafter. The sunset was eliminated. For most readers, this change is largely academic—the exemption was already high enough that federal estate taxes didn’t apply. But for those with estates approaching or exceeding $7 million, the urgency to make large gifts before year-end 2025 has now passed. The more relevant planning concerns for most people remain income taxes, beneficiary designations, and the probate avoidance strategies described in this article.

Option 7: Simplified probate for small estates

Almost every state offers a simplified or expedited probate process for small estates. In North Carolina, the simplified estate threshold is $20,000 for personal property (not including real estate). Estates qualifying under this threshold can avoid the full probate process. Other states have significantly higher thresholds—some as high as $500,000. Check your own state’s rules if you think a simplified process might apply to your situation.

What we’re doing

Given what I have learned, my wife and I are seriously revisiting the question of a simple living trust. If we establish one, we’ll likely fund it with our house and vehicles—the assets that cannot pass via POD designations—while continuing to use beneficiary designations for our financial accounts.

A final note on theology: as I have written elsewhere, notwithstanding Proverbs 13:22, the Bible does not command Christians to leave an inheritance. You are free to spend it all or give it away. But if leaving something to heirs and doing so gracefully is your desire, the strategies in this article can help you do that with minimal burden on those you love.