PROBATE vs. NON PROBATE ASSETS

People often confuse probate vs. non-probate and taxable vs. non taxable assets. Probate assets are those that do not have a beneficiary designation. They are assets that were either not capable of being held jointly or were not held jointly. Sometimes people intentionally create probate assets by removing a beneficiary designation because they want that asset to be disposed of by the terms of the Last Will and Testament or by the terms of the Trust.

Non-probate assets are those that do not follow the terms of a Will or Trust, or, intestacy, in the absence of a Will or trust. A non-probate asset immediately passes to the named beneficiary or co-owner upon the death of the first person. Non-probate assets are those that already have a beneficiary designation, or, those that have a “payable on death” or “transfer on death” clauses. Non-probate assets tend to be Retirement accounts. Spouses tend to hold deeds to their houses as “husband and wife” or “joint tenants with rights of survivorship,” which means that upon the death of the first spouse, the real property automatically passes to the survivor. Unless there was fraud, duress, coercion, undue influence, or incapacity,  a beneficiary designation in place at the time of the decedent’s death overrides the terms of the Will.

Common Examples of Probate Assets Commons Examples of Non Probate Asset
Jewelry Retirement Account(s) with Beneficiary Designation (IRAs, 401ks, Annuities)
Furniture Co-owned U.S. Savings Bonds
Automobiles Pension Plan Distributions with Beneficiary Designations
Stock Certificates held in Book Entry Form Joint Ownership with Right of Survivorship
Interest in a Corporation or LLC where Decedent was the Sole Owner (and likely did not create an operating agreement to discuss succession) Life Insurance
Checking Account (most banks do not allow you to put a beneficiary designation on a checking account) Trust Funds (Revocable or Irrevocable)
Money Market Accounts (where individual forget or intentionally did not place a beneficiary designation) Assets with a Life Estate

When an individual dies, it is important for the nominated executor, or, next of kin, to review all of a decedent’s assets to determine whether they are probate or non-probate. We can help you review all papers and file the Probate/Administration petitions with the Court.

For more information, please contact probate and estate planning attorney Regina Kiperman:
Phone: 917-261-4514
Email: rkiperman@rklawny.com
Or visit her at her new location:
80 Maiden Lane
Suite 304
New York, NY 10038

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