I know, a happy little Friday topic! One of the best stress-relievers you can leave for your family is to keep as many financial accounts and insurance policies as possible out of your estate. Why? Because your beneficiaries will get the money faster and with (mostly) little hassle.
You see, most financial accounts allow you to designate a beneficiary, a person who will more or less automatically get that account or the money in it when the financial institution is notified of your passing. A POD, or "pay on death", account only requires a death certificate in order for the bank or credit union to cut a check to the person you designated as the POD beneficiary. A TOD, or "transfer on death", account is much the same way, only the assets are transferred into a new account in the beneficiary's name when the institution gets a copy of the death certificate and some paperwork gets filled out. The reason we have TOD accounts rather than making them all POD is that the assets in a TOD account might fluctuate in value or have penalties for liquidation (think fluctuating stocks or mutual funds, or an IRA where the beneficiary isn't old enough to start making penalty- and tax-free withdrawals).
Another way to avoid having accounts pass through your estate involves designating the accounts as JTWROS (joint tenants with right of survivorship), where the surviving owner just keeps on owning the assets in the account - many married couples have this type of account.
Quick note on insurance policies: sometimes people take out a policy and name their estate as the beneficiary (or, as too many military members are advised, say "by law"). Although there are situations where this is the smart thing to do, it's usually not. Like mostly not. Like practically never. If you want your spouse, kids or whoever to get the insurance proceeds, specifically name them in the beneficiary designation form the insurance company provides. Easy peasy.
All of these tools will ensure that the assets you want your heirs to have will get to them quickly, rather than having to wait (sometimes months) for the will to be probated. Your survivors will thank you! Now go have a beer, it's Friday!
Musings, observations, the occasional whineage and some funny stuff.