What is Probate and Non-Probate Property in Estate Planning?

Discover how probate and non-probate estate planning differ and when it’s appropriate to choose one option over the other.

Property falls either of two categories: Probate or Non-probate. Discover how probate and non-probate estate planning differ and when it’s appropriate to choose one option over the other.

Probate vs. Non-Probate

Probate refers to the process in which property would pass under the terms set forth in a will, or in the absence of a will, under the intestacy laws of the state. Non-probate refers to all other properties that pass, typically under contractual arrangements. Essentially, some assets are distributed to heirs through court oversight (probate) and some assets go directly to the beneficiaries or surviving joint owner or tenant (non-probate).

Probate Assets

Probate assets are any and all assets that are owned solely by the deceased that has no beneficiary designation. Probate assets generally include (but are not limited to):

— Real property (unless jointly owned or a life estate)

— Personal property (jewelry, automobiles, etc.)

— Bank accounts in the deceased person’s name (without a TOD/POD designation)

Non-Probate Assets

Non-probate assets bypass the court process and the beneficiary can inherit them directly regardless of what it states in one’s last will and testament. These assets include:

— Property owned by a trust

— Retirement accounts (i.e., IRA, 401(k)

— Jointly held bank accounts

— Life Insurance policies

Understanding the Importance

During the process of planning your estate, it’s important to be able to differ from non-probate and probate property. Since your will does not control the distribution of non-probate property, ensuring that non-probate property is distributed correctly is of the utmost importance. Typically, beneficiary designations (primary and contingent) should match the distributive scheme set forth in one’s last will and testament.

Note: This article is provided for informational purposes only, and no one should rely upon the information contained herein as constituting legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied, are given as to the accuracy or applicability of the information contained herein. The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader’s facts and circumstances. It is strongly suggested that you seek individual counsel to review your specific needs and goals.


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