Assets with a survivorship, beneficiary, trust, or contractual designation—think joint bank accounts, TOD securities, life-insurance proceeds—skip Surrogate’s Court.
Skipping probate can speed transfers, cut legal fees, and keep financial details private.
Assets That Pass Outside Probate – The Four Main “Probate-Avoidance” Buckets
- Jointly held property with rights of survivorship
- Real estate titled “tenants by the entirety” (married couples) or “joint tenants” passes automatically to the survivor under Real Prop. L. § 240-b.
- Joint bank or brokerage accounts move instantly to the co-owner (Banking L. § 675).
- Real estate titled “tenants by the entirety” (married couples) or “joint tenants” passes automatically to the survivor under Real Prop. L. § 240-b.
- Transfer-on-Death (TOD) or Payable-on-Death (POD) designations are Assets That Pass Outside Probate
- All major brokerages support TOD instructions; securities transfer upon receipt of a certified death certificate (EPTL § 13-4.1).
- Banks honor POD “in trust for” (ITF) tags, wiring funds to the named beneficiary.
- All major brokerages support TOD instructions; securities transfer upon receipt of a certified death certificate (EPTL § 13-4.1).
- Contractual-benefit assets
- Life-insurance proceeds go directly to the named beneficiaries under Ins. L. § 3203.
- Qualified retirement plans & IRAs follow federal ERISA/IRC rules: beneficiary-designation form controls, overriding the will.
- Life-insurance proceeds go directly to the named beneficiaries under Ins. L. § 3203.
- Assets held in trust
- Revocable living trusts, irrevocable Medicaid trusts, and insurance trusts already hold legal title; the trustee distributes per trust terms without court supervision.
- Revocable living trusts, irrevocable Medicaid trusts, and insurance trusts already hold legal title; the trustee distributes per trust terms without court supervision.
Why Avoiding Probate Can be a Smart Strategy
| Advantage | How it helps New York families |
| Speed | NYC probate petitions can sit 3–6 months awaiting review; non-probate assets transfer within weeks |
| Cost | No filing fee, newspaper citation, or compulsory accounting |
| Privacy | Wills become public; beneficiary designations and trusts do not |
| Contestation shield | Disgruntled heirs can challenge designations, but only via Supreme Court plenary actions under EPTL § 5-1.4—far less common than Surrogate’s Court will contests |
Common Pitfalls—And How to Fix Them to Create Assets That Pass Outside Probate
- Stale or missing beneficiary forms
- Problem: Divorce or death of a named beneficiary can create a default payout to your estate—undoing the probate-avoidance plan.
- Fix: Review all designations annually and after major life events.
- Problem: Divorce or death of a named beneficiary can create a default payout to your estate—undoing the probate-avoidance plan.
- Inconsistent titling
- If you open a “joint account” but complete only one signature card, the bank may treat it as convenience (Matter of Camarda, 63 N.Y.2d 930 [1984]). Always have both owners sign.
- If you open a “joint account” but complete only one signature card, the bank may treat it as convenience (Matter of Camarda, 63 N.Y.2d 930 [1984]). Always have both owners sign.
- Estate-tax blind spots
- Skipping Surrogate’s Court does not skip tax. Non-probate assets are still included in the federal (§ 2033) and NY gross-estate calculations.
- OBBBA alert: The July 4 2025 “One Big Beautiful Bill Act” increased the federal exemption to $15 million but left New York’s “cliff” untouched; a large TOD account can trigger NY estate tax unless credit-shelter trusts are used.
- Skipping Surrogate’s Court does not skip tax. Non-probate assets are still included in the federal (§ 2033) and NY gross-estate calculations.
- Medicaid look-back exposure
- Transferring real estate to joint tenancy within five years of applying for Medicaid can generate a penalty period. Use irrevocable trusts instead.
- Transferring real estate to joint tenancy within five years of applying for Medicaid can generate a penalty period. Use irrevocable trusts instead.
Coordinating Probate-Avoidance With an Overall Plan
A solid estate plan usually layers these tools:
- Pour-over will —captures stray assets and names the same trustee/executor.
- Revocable living trust —holds real estate and investment accounts; trustee steps in at incapacity.
- Updated beneficiary designations —retirement, life insurance, TOD brokerage.
- Property titling check-up —verify deed language and bank signature cards.
Tip: Keep a master asset spreadsheet listing every account, last beneficiary review date, and trust ownership. Executors often waste months hunting for paperwork that could have been summarized on one page.
Bottom Line To Create Assets That Pass Outside Probate
Probate avoidance isn’t just about dodging Court; it’s about speed, privacy, and cost-control—but only if the designations are current, coordinated, and tax-aware. Conduct annual beneficiary reviews, align titling with trust strategy, and your heirs can inherit in weeks—not months—while sidestepping NYC Surrogate’s Court red tape.
For more information, please contact NYC Probate Litigation, Guardianship, Probate, and Estate Planning attorney Regina Kiperman:
Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com
Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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