Assets that have to go through the probate process in order to be lawfully distributed to beneficiaries generally include any assets owned by the deceased person at the time of death that don’t have some mechanism to get legally transferred to a survivor or death beneficiary. Probate assets may include:
- real estate
- Note: Property owned by the decedent with another as a “joint tenants with right of survivorship” passes to surviving joint tenant(s) without the need for probate, but property owned by the decedent with another person as “tenants in common” does not automatically pass to the other surviving tenant and must be probated;
- bank accounts (if no valid death beneficiary designations);
- stock, bonds, mutual funds, CDs, brokerage accounts (if no valid death beneficiary designation);
- automobiles, boats, trailers;
- business interests, contract rights, accounts receivable; and
- tangible personal property (see discussion of tangible personal property in Making Gifts).
Title records such as land property deeds should be examined to confirm who owned the real estate and whether title to the real estate was set up to automatically transfer to someone else at death (e.g. joint tenant with right of survivorship or transfer on death deed (TODD)). Vehicle titles should also be checked to confirm if the deceased person was the sole owner and if the title is subject to any lender security interest. Financial accounts need to be reviewed to verify the owner(s) named on the account and whether the deceased person made any death beneficiary designation if permitted.
Non-probate assets are those which the owner set up in a manner that allows them to be transferred to someone else upon the owner’s death, including:
- Life insurance or annuities (provided the beneficiary is someone other than the decedent’s estate or personal representative)
- Retirement accounts such as IRAs, persons, profit-sharing benefits (provided the beneficiary is someone other than the decedent’s estate or personal representative)
- Assets held by the decedent and other person(s) as joint tenants with rights of survivorship.
- Certain multi-party accounts (i.e. accounts payable on death to particular another person, accounts in trust for another person)
- Real estate owned as joint tenants with rights of survivorship;
- Real estate subject to a transfer on death deed; or
- Property titled in the name of a trustee of the decedent’s revocable trust.
Sometimes assets that might have been set up as non-probate assets are nevertheless probate assets because the deceased person (intentionally or unintentionally) never took the necessary steps to allow for the automatic transfer of the asset to someone else (e.g. not naming a death beneficiary on an account when the owner was permitted to name a death beneficiary). Similarly, sometimes people will name “my estate” or “my personal representative” as the death beneficiary of an asset, thereby channeling the asset into the probate.
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