Probate v. Non-Probate: What Is the Difference?
When planning your estate it is important to understand the difference between probate and non-probate assets. Probate is the process through which a court determines how to distribute your property after you die. Some assets are distributed to heirs by the court (probate assets) and some assets bypass the court process and go directly to your beneficiaries (non-probate assets).
Posted on April 25, 2022
The probate process includes filing a will and appointing an executor or administrator, collecting assets, paying bills, filing taxes, distributing property to heirs, and filing a final account. This can be a costly and time-consuming process, which is why some people try to avoid probate by having only non-probate assets.
Probate assets are any assets that are owned solely by the decedent. This can include the following:
- Real property that is titled solely in the decedent's name or held as a tenant in common
- Personal property, such as jewelry, furniture, and automobiles
- Bank accounts that are solely in the decedent's name
- An interest in a partnership, corporation, or limited liability company
- Any life insurance policy or brokerage account that lists either the decedent or the estate as the beneficiary
FREE WEBINAR
5 Things to Know About
Estate Planning
When You Turn Sixty-Five
Non-probate assets can include the following:
- Property that is held in joint tenancy or as tenants by the entirety
- Bank or brokerage accounts held in joint tenancy or with payable on death (POD) or transfer on death (TOD) beneficiaries
- Property held in a trust
- Life insurance or brokerage accounts that list someone other than the decedent as the beneficiary
- Retirement accounts
When planning your estate, you need to take into account whether property is probate property or non-probate property. Your will does not control the distribution of non-probate property. Check the ownership of your property and your accounts to make sure jointly owned property will be distributed the way you want it to. It is also important to review your beneficiary designations.
Contact us today to determine whether your property is being distributed the way that you want it to.
More from our blog…
What to Do With an Inherited IRA
Inheriting an IRA may seem like a good thing, but there can be tax consequences if you aren't careful. If you inherit an IRA, you [...]
Seven Ways to Distribute Your Personal Property Fairly
Unlike money, personal belongings usually can't be divided equally after their owner passes away. For this reason, distributing possessions like furniture, jewelry, dishes, silverware, artwork, [...]
Capacity Requirements for Executing Estate Planning Documents
Proper execution of a legal instrument requires that the person signing have sufficient mental "capacity" to understand the implications of the document. While most people [...]
What You Should Know About Long-Term Care
Research shows that roughly one in seven adults aged 65 or older will need long-term care at some point in their later years. Meanwhile, tens of millions [...]
Recent blog posts
FREE WEBINAR
5 Things to Know About
Estate Planning
When You Turn Sixty-Five