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
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…
Some Social Security Beneficiaries Can Get Retroactive Payments — But at a Cost
If you need a lot of cash on hand upon retirement, Social Security offers a lump-sum payment option that’s worth six months of benefits. However, [...]
Medicare Enrollment Period Extended for Those Who’ve Been Getting a Busy Signal
Medicare is part of the Social Security Administration (SSA), so if you need to enroll in Medicare, that’s whom you contact. But in recent months, [...]
What to Do If You Want to Leave Your Children Unequal Inheritances
Parents usually want to leave their children equal shares of their estate, but equal isn’t always fair. If you plan to provide more (or less) [...]
Using an Intentionally Defective Grantor Trust to Transfer Assets
An intentionally defective grantor trust (IDGT) is a common estate planning tool that is used by wealthy families to transfer assets from one generation to [...]
Recent blog posts
