In the United States, when a person passes away, their property pays for any of their liabilities, and the rest is distributed to their heirs according to the terms of their will. But, there are situations where their assets will go directly to the beneficiaries without the probate court’s involvement. Read on to find out more about properties that are subject to probate and those that are not.
Probate vs. non-probate property
Probate properties are assets that are solely yours. There are no any other co-owners or beneficiaries or any other person with rights to it.
Non-probate properties are assets that are held jointly with other people or have a beneficiary designation. Such property will go directly to the named beneficiaries without involving the probate court.
Properties that are subject to probate
Will & probate matter for the following assets:
- Your personal property like your car, furniture, jewelry, household items, etc.
- Your life insurance policy that mentions your descendant(s) as the beneficiary.
- Bank accounts that are solely in your name and your descendants.
- Real estate property that you own.
- Your interest in a limited liability company, corporation or a partnership.
- Your stocks and bonds.
Properties that are not subject to probate
- Your retirement accounts and life insurance policy that mentions someone else other than your descendant as the beneficiary.
- Savings bond, securities and funds registered on payable on death (POD) or transfer on death (TOD) forms.
- Any asset held in a living trust.
- Real estate property that is held jointly in tenancy.
- Brokerage and bank accounts that are held jointly on a tenancy.
When planning your accounts, you should know which ones are subject to probate and those not. You should then make sure that they are well distributed to your beneficiaries as you want them to be. You can contact an attorney to help oversee how your property will be distributed to your beneficiaries when preparing your will.