Asset Allocation &
Designating Beneficiaries.
Once you've inventoried your assets, the next step is deciding who gets what — and which probate-avoidance method applies to each. Joint tenancy, POD designations, beneficiary forms, and living trusts can handle virtually your entire estate without a court proceeding.
Three steps to
allocate your estate.
Asset allocation for estate planning isn't complicated — it's mostly a matter of working through your assets systematically. The sample chart on the Probate Avoidance page shows the end result; this page explains the thinking behind it.
Most of a well-planned federal retirement estate can be transferred to heirs entirely outside of probate — through nothing more than correct account titling, updated beneficiary designations, and a simple living trust for individually-owned property. The whole exercise costs more in attention than it does in money.
You need to identify how your property is currently registered, then evaluate which probate avoidance method to apply to each asset. Multiple methods can be mixed freely depending on your situation.
Inventory every asset and how it's currently owned
List every account, property, vehicle, investment, and insurance policy. For each, note whether it's held jointly, individually, in a trust, or otherwise. Check how the title reads — the exact wording on a deed or account can determine whether an asset passes by joint tenancy or goes through probate. If you're unsure how a property is titled, contact the attorney or title company that handled your closing, or call a local title company.
Decide who you want to receive each asset
This is the most personal part of the process. Consider the practical reality, not just your wishes: a surviving spouse with a reduced annuity (55% of the retiree's annuity under CSRS) needs more financial cushion than a partner with their own full income. Design your allocation so the most financially vulnerable survivor has the larger estate. Also consider that some assets — like retirement accounts — may have better tax outcomes passing to a surviving spouse than directly to children.
Choose the right probate-avoidance method for each asset
Joint tenancy works best for shared property you want to pass automatically to a surviving co-owner. POD and TOD designations are ideal for individual bank and investment accounts. Beneficiary forms handle retirement accounts, TSP, and life insurance. A living trust covers individually-owned securities, personal property, and any asset where you want to name multiple beneficiaries or add conditions. You'll likely use all four methods across different assets.
Federal retiree —
real-world example.
Here's how one federal employee approaching retirement structured his entire estate to pass outside of probate — while ensuring his wife had a larger financial cushion given her reduced survivor annuity.
Pre-retirement salary $68,000 · FEGLI standard coverage with Option A
This couple designed their plan so the wife's estate would be larger than the husband's — because her surviving income (55% of the annuity) is significantly less than his during retirement. The husband's estate is intentionally kept smaller in the plan because his earning and benefit power is greater while he is alive. Every joint tenancy asset passes automatically to the surviving spouse. The wife's separately-held assets are directed entirely to the children via trust and POD designations. The husband's separately-held assets are split between spouse and children, with life insurance providing the primary survivor protection. Caution: FEGLI coverage can be reduced after retirement but never increased — unless an extremely rare open season is offered.
Which tool for
which asset.
Each probate avoidance method has a natural home. Understanding which tool fits which asset type makes the allocation process straightforward. Most estates use all four methods on different assets.
Joint Tenancy
Payable / Transfer on Death
Beneficiary Designation
Revocable Living Trust
What a living trust can cover beyond securities
A living trust isn't just for investment accounts. By listing items on an attachment (schedule) to your trust document, you can transfer virtually any non-registered personal property to your heirs without probate — including items that can't easily receive a POD designation.
Why this couple used a trust instead of POD for stocks
Both the retiree and his wife owned individual stocks they wanted to split equally between their two children. Many brokerage and transfer agent accounts only permit a single POD beneficiary — which doesn't work for dividing an asset between two heirs. A living trust solved this cleanly: both stock holdings were transferred into the trust with equal shares designated to each child. The trust handles the distribution, and nothing goes through probate.
Your next steps
Work through the three steps on your own first — inventory, assign, choose method. Then formalize everything with professional help. The planning concepts here are straightforward; the legal execution of a trust, proper deed preparation, and updated beneficiary forms should be handled by an estate attorney.
After you've mapped your assets
For the probate-avoidance tools that require no attorney — POD designations, beneficiary form updates, and joint titling — contact each financial institution directly and request the forms. For TSP, update your beneficiary at TSP.gov. For FEGLI and your CSRS/FERS annuity, update beneficiary designations through OPM.
For assets that will go into a living trust, engage an estate attorney. Many trusts for straightforward estates are less expensive than most people expect — and the cost is trivially small compared to the probate fees they avoid.
Revisit your allocation chart every few years, and specifically after: any marriage, divorce, death of a named beneficiary, birth of a child or grandchild, acquisition of significant new assets, or a major change in your financial situation.
Estate planning
tools & forms.
Beneficiary designation portals for TSP and OPM, estate planning guides, and further reading on probate avoidance techniques.