By Sam O’Neill
Estate planning requires a clear understanding of probate and non-probate assets, which determine how property and assets are distributed after someone’s passing. While many individuals prioritize creating a will, it is equally important to review non-probate assets to avoid unintended complications for your loved ones. Differentiating between these asset types helps you plan your estate effectively and ensures your assets are distributed according to your wishes.
Probate assets are owned solely by the deceased individual, with no joint owner or designated beneficiary. Probate involves a legal process where a court validates the will, resolves disputes, and distributes assets according to the decedent’s will or state law if no will exists.
Non-probate assets, on the other hand, bypass probate and go directly to the designated beneficiaries. Common examples of non-probate assets include life insurance policies with named beneficiaries, assets with transfer-on-death (TOD) or payable-on-death (POD) provisions, retirement accounts with designated beneficiaries, jointly held property with rights of survivorship, jointly owned bank accounts, and assets held in trust.
Regularly reviewing your probate and non-probate assets ensures that your beneficiaries receive their inheritances promptly and without complications. It’s crucial to periodically update beneficiary designations on non-probate assets to reflect changes in your family structure, such as marriage, divorce, or the birth of children.
Additionally, keeping your will up to date is essential in case a joint owner or beneficiary passes away before you. An updated will ensures that your assets are distributed to the intended individuals. Taking a comprehensive approach to estate planning involves considering both probate and non-probate assets. Understanding the distinctions between probate and non-probate assets allows you to make informed decisions about distributing your assets according to your wishes.
With proper planning, you can strategically structure your estate to minimize the time, costs, and potential complications associated with distributing your assets. This proactive approach ensures a smoother transfer of assets to your loved ones, providing you with peace of mind in your estate planning goals.
If you have any questions regarding probate and non-probate assets, gaining the assistance of an experienced estate planning attorney can be beneficial. Abrahams Kaslow & Cassman LLP has been assisting families with estate planning since 1944. Contact Sam O’Neill at [email protected] for more information.