Whether you are dealing with the final affairs of someone who recently passed or are considering estate planning options, you will need to understand the basics of probate. The definition of probate, also called estate administration, is the process by which a person’s final affairs are legally wrapped up after his or her death. Probate might refer to the court proceedings for determining the validity of a will when there is one, but intestate estates also go through probate.
Payment of creditors is an important part of the estate administration process, but many of the key issues that arise in probate involve the decedent’s assets. You might be surprised to learn that not all real and personal property is subject to distribution via the deceased person’s will or intestate laws. Instead, some assets are considered non-probate, i.e., they pass outside the probate process. A probate and estate administration attorney can provide details, but an overview may be helpful.
Non-Probate Assets
Real estate and personal property will typically go through the estate administration process if they were owned by the deceased, as an individual, upon death. There are exceptions for items that pass outside probate by “operation of law” – meaning that they go to an intended beneficiary automatically, not according to a will or intestate laws. Examples of non-probate assets include:
- Real estate held by joint tenants with right of survivorship, where an owner’s interest goes to the others upon death;
- Other joint assets that are usually owned by spouses, such as bank accounts and vehicles that bear a title of ownership;
- Pay-on-Death (POD) and Transfer-on-Death (TOD) accounts, which pass to the designated beneficiary upon presentation of a death certificate;
- Life insurance policies, the proceeds of which are also paid to the designated beneficiary; and,
- Any assets you title in the name of a living trust that you create during your lifetime.
Strategies for Avoiding Probate in Estate Planning
Though non-probate assets pass to joint tenants and beneficiaries by operation of law, it is still critical to prepare a will and other estate planning documents. Together with the following strategies, you can avoid or minimize the estate administration process:
- Consider adding a joint tenant to real estate, and make sure to include language regarding right of survivorship.
- Make arrangements to include a designated beneficiary – and successor beneficiary, where appropriate – on POD and TOD accounts.
- Create a living trust along with a “pour-over will,” which transfers any assets you own at death into the trust. The pour-over will is a fallback option for items you did not have a chance to transfer before your passing.
Learn More by Consulting With a Probate and Estate Administration Lawyer
This overview of leveraging non-probate assets is useful, as avoiding or minimizing the estate administration process can save money and hassles upon your passing. If you are the one handling the affairs of a deceased individual, this information is also helpful for understanding which items are not part of the estate. For more information, please contact Francois Williams Legal LLC to schedule a consultation today.
