Should I use beneficiary designations or joint tenancy instead of a revocable living trust?
Some assets get transferred at the time of your death simply by operation of law. For example, assets that you own with others as joint tenants automatically become theirs upon your death. Other assets are transferred by virtue of beneficiary designations that you've used on those assets. A prime example would be the beneficiary you've named to receive your retirement account upon your death.
The threat of probate is occasionally overstated. However, relying solely on using the joint tenant form of title or beneficiary designations may fail to accomplish the objective of avoiding probate. For example, without further action, when the last surviving joint tenant on a property dies, it will need to be probated.
Beneficiary designations on accounts generally have the benefit of permitting one to name one or more alternate beneficiaries in case the primary beneficiary dies. Therefore, there's generally some ability to plan for contingencies. That being said, the naming of alternate beneficiaries may not be adequate to cover all of the potentialities of how your asset may need to be transferred. For example, if all of the beneficiaries you've named on a retirement account pass away, that asset may need to be probated at the time of your death to allow your heirs at law to claim it (which, by the way, may not be what you want).
Usually clients are advised to name their revocable living trust as either the primary or secondary beneficiary of assets that utilize beneficiary designations. This may depend on the client's marital status and other circumstances. Naming a trust as the beneficiary of retirement accounts involves consideration of the minimum distribution rules, so it's important to consult with a qualified professional when making changes.