Avoiding Probate in South Dakota: Wills, Beneficiary Designations, TOD/POD, and Trusts | South Dakota Probate

Detailed Answer

Short answer: A will alone usually does not avoid probate in South Dakota. To keep assets out of probate you typically use beneficiary designations (life insurance, retirement accounts), payable-on-death (POD) or transfer-on-death (TOD) designations for bank and investment accounts, joint ownership with right of survivorship, and sometimes transfer-on-death deeds or trusts. Each tool covers different types of property, and beneficiary designations generally control over a will for the assets that use them.

How each tool works under South Dakota law

Wills: A will directs how probate assets are distributed after you die. It must be submitted to the probate court to carry out those wishes unless all probate-eligible property already passes outside probate. A will cannot, by itself, transfer property that already has a valid beneficiary designation or joint survivorship right.
Beneficiary designations: Life insurance policies, IRAs, 401(k)s, and many other retirement accounts pass directly to the named beneficiary and avoid probate. The plan’s beneficiary designation governs who receives the asset, even if your will says otherwise. Always keep these up to date.
Payable-on-death (POD) / Transfer-on-death (TOD) accounts: Many banks and brokerages let you name a POD or TOD beneficiary for cash accounts and some securities. Properly completed forms transfer those accounts automatically to the named beneficiary without probate.
Joint ownership with right of survivorship: Property owned jointly with rights of survivorship (for example, joint bank accounts or real estate held as joint tenants) passes to the surviving co-owner automatically at death and avoids probate for that share. Be careful: joint ownership can create unintended tax or control consequences while you are alive.
Transfer-on-death (beneficiary) deeds for real property: Some states permit a transfer-on-death deed (also called a beneficiary deed) that names a beneficiary who will receive real estate when you die without probate. If you are considering a beneficiary deed in South Dakota, check the relevant statutes or discuss with an attorney to confirm availability and proper form.
Revocable living trusts: A properly funded revocable trust can hold title to real estate and other assets and pass them to beneficiaries without probate. Creating a trust and retitling assets into it requires careful drafting and administration.

Important rules and interactions

Beneficiary designations generally override wills for the assets they cover. If your beneficiary form names someone other than the person named in your will, the beneficiary form usually wins.
Assets not covered by a beneficiary designation, joint-rights ownership, TOD/POD form, deed, or trust will typically be subject to probate and distributed under your will or state intestacy rules if there is no valid will.
Creditors can make claims during probate. Some assets that pass outside probate (like retirement accounts) may still be reachable by a decedent’s creditors depending on the claim and timing.
Major life changes (marriage, divorce, birth, death, new estate) require reviewing and often updating beneficiary designations, account titling, deeds, and trusts to ensure they still reflect your wishes.

Practical hypothetical

Imagine a married couple in South Dakota, Alice and Ben, who want to make sure the surviving spouse and then their two children inherit without probate:

They each name the other as primary beneficiary and their children as contingent beneficiaries on IRAs and life insurance.
They convert bank accounts to POD designations payable to the surviving spouse and retitle a brokerage account as a TOD account to pass to the spouse.
They retitle their home into a revocable living trust or record a transfer-on-death deed (if available and suitable) naming the surviving spouse as primary taker and the children as contingent takers.
They keep a simple pour-over will that transfers any assets accidentally left outside the trust into the trust on death.

With this plan, most assets pass outside probate. But they should periodically review beneficiaries, retitling, and the trust to avoid surprises (and consult an attorney to draft documents correctly).

South Dakota statutes and where to check

South Dakota’s laws on probate, wills, trusts, and related procedures are in the South Dakota Codified Laws. For the exact statutory text and up-to-date rules, review the state statutes online:

South Dakota Codified Laws (statutes search) — start here to search for probate laws, wills, trusts, and transfer-on-death rules.

Because statutes are updated and some tools (like beneficiary deeds or specific small-estate procedures) have precise requirements, review the statutes directly or ask an attorney to confirm the current law and forms.

Helpful Hints

Inventory your assets by type: retirement accounts, life insurance, bank accounts, real estate, brokerage accounts, and personal property. Note which already have beneficiary designations or joint owners.
Update beneficiary designations after marriage, divorce, births, deaths, and major financial changes. The beneficiary form drives distribution for those accounts.
Consider using POD/TOD designations or a revocable trust to reduce the assets that must go through probate. Each has pros and cons—trusts can be more comprehensive but cost more to create and manage.
Be mindful that joint ownership can expose the asset to the joint owner’s creditors and may have tax and control consequences while both owners are alive.
Keep one clear list of account numbers, beneficiary forms, and titles. Make sure the person you trust (or your attorney) knows where to find these documents at death.
Don’t rely on verbal statements or notes; use formal beneficiary forms, properly executed deeds, or properly funded trusts to create enforceable transfers.
Check whether South Dakota offers a simplified or small-estate procedure that can avoid full probate for estates under a certain size—statutory thresholds and procedures change, so confirm in the statutes or with a lawyer.
Work with an attorney licensed in South Dakota for document drafting, deed recording, and to confirm language and procedures meet state requirements.

Disclaimer: This information is general education about South Dakota law and is not legal advice. It does not create an attorney-client relationship. For advice about your situation and help preparing forms, speak with a licensed South Dakota attorney.