Probate is the legal process during which a will is reviewed and determined to be valid or invalid by the court. This process occurs whether the deceased (referred to as the decedent) had a will or did not have a will – albeit, the process is much smoother for those that have a will in comparison to those who do not.
With that said, some assets are subject to probate, while others are not. The following is an examination of what assets are subject to probate and which can avoid probate.
Which Assets are Subject to Probate and Which Assets are Not?
As mentioned above, not all assets are subject to probate. However, the following are examples of items that are subject to probate:
- Real estate
- Vehicles
- Furniture
- Art
- Clothing
- Jewelry
- Bank accounts solely in the decedent’s name
What Assets are Not Subject to Probate?
Not every asset you own is subject to probate. Examples of some assets that are not subject to probate include the following:
- Life insurance accounts that have a beneficiary named
- 401(k) accounts that have a beneficiary named
- Pension plans
- Work-related funds, such as wages, salaries and commissions
- Assets held in a Living Trust
What About Assets that are Jointly Owned?
If you co-own any assets with someone else, these assets are considered jointly owned. This is often seen when married couples jointly own a home, or have a joint bank account.
In cases of jointly owned assets, ownership of these assets will go to the surviving co-owner upon your death.
Can Naming a Beneficiary Help Avoid Probate?
In many cases, naming a beneficiary who will receive the assets you want to give them upon your death can help keep these assets away from probate. However, there are a few important instances in which you can name a beneficiary yet the assets will still need to go through probate. Such instances include:
- Death of the beneficiary
- Incapacitation of the beneficiary
- Your beneficiary is a minor
Death of the beneficiary
If the beneficiary that you named passes away before you do, the assets may then be subject to probate.
Incapacitation of the beneficiary
As in the case of the death of your beneficiary, if this person becomes incapacitated, the assets may become subject to probate.
Your beneficiary is a minor
If your beneficiary is a legal minor at the time of your passing, the assets you intend to pass along to them can become subject to probate.
What Would Happen if You Pass Away without a Will?
If you pass away and do not have a will (otherwise known as dying intestate), the probate process becomes significantly more complicated. In this instance, you have no say over what assets get distributed to whom; the court will decide who gets what assets. In many cases, this can lead to uncomfortable and tension-filled moments for your family members, which is likely something that you would want to avoid putting your loved ones through.
With proper planning, the probate process does not need to be stressful or complicated. For any questions regarding the probate process, or any other assistance with your estate planning needs, we are here to help. Contact us today to learn more about how we can work with you.
For more information regarding various estate planning and elder law topics, view our resources page, where you will be able to find previous blog articles, newsletters and our informative webinar series.
Image by Mohamed Hassan from Pixabay
