There is much confusion about the probate court process, including how much it costs, the time involved, and whether it can be avoided. A basic understanding of probate and non-probate assets is an important starting place to understand the role that the probate court will play in the transfer of assets after your death.
Non-Probate Assets. Non-probate assets include assets held as joint tenants with rights of survivorship, assets with a beneficiary designation, and assets held in the name of a trust or with a trust named as the beneficiary. Any asset held as joint tenants with rights of survivorship (JTWROS) will pass directly to the surviving joint owner. Assets with beneficiary designations may include life insurance policies, 401(k)s, IRAs, annuities, and assets with a pay-on-death (POD) or transfer-on-death (TOD) designation. These assets will pass directly to the beneficiary or beneficiaries who were designated on the asset. Non-probate assets can be claimed by the beneficiaries without the involvement of a probate court. Your Will does not control these assets.
Probate Assets. Probate assets are those assets held in your individual name only, with no beneficiary designation (or no living beneficiary), and not held as joint tenants with rights of survivorship. These assets are required to pass through probate court and are distributed according to your Will, and if there is no Will, to your next of kin, according to state law.
When you are deciding who will benefit from your estate and to what degree, it is important to consider both your probate and non-probate assets.
Our office can help you navigate the various assets and help you to achieve your estate planning goals in the most efficient and cost-effective way. Call to schedule a consultation to learn more.