Probate Vs. Non-Probate Assets: What You Need to Know

 Posted on March 03,2023 in Estate Planning

When it comes to estate planning, there are a variety of issues to consider. A person or family that creates an estate plan will need to make decisions about what will happen after someone's death, although issues related to medical care, personal care, and financial concerns while they are still alive may also be an important consideration. When determining how to distribute different assets to a person's heirs after their death, it is important to understand the difference between probate and non-probate assets. In a nutshell, probate assets are those that must be considered during the probate process, which must take place before title transfers can be performed. Non-probate assets, on the other hand, will not be considered during the probate process. By understanding how different types of assets will be transferred to beneficiaries, a person can rest assured that their affairs will be handled correctly after they are gone.

Understanding Probate Assets

Probate assets are any assets that are held in the deceased person’s name alone or jointly with another person who also dies. These types of assets pass through a court-supervised process known as probate. During this process, the court will determine who is entitled to receive a portion of these assets based on state law or instructions provided in the person's will. Typically, the deceased person’s debts must be paid off first before any remaining assets can be distributed to his or her heirs. This process usually takes months and can require expensive legal fees, and the person's survivors may not be able to access their inheritance right away.

Probate assets generally include properties or investments that are held solely by an individual. This can include real estate, stocks, bonds, and other investments, as well as physical property such as cars or household belongings. Assets must be inventoried during the probate process, and the executor or personal representative of the estate will need to make a detailed accounting and ensure that all assets are transferred properly to the beneficiaries.

Understanding Non-Probate Assets

Non-probate assets are those that pass directly to their designated beneficiaries without having to go through the probate process. Examples of these types of assets include joint accounts with right of survivorship, transfer on death accounts, trusts, retirement accounts with named beneficiaries, life insurance policies, and property jointly owned with a spouse or another person.

These types of assets will be automatically transferred to joint owners or beneficiaries upon death without court involvement or approval. Because of this, they often provide more efficient solutions for distributing an inheritance quickly and easily after a person passes away. It is also important to note that even if a person has a will in place, non-probate assets will be distributed to their designated beneficiaries instead of following the terms of their last will and testament.

Contact Our Irving Estate Planning Attorney

When creating an estate plan, it is essential to understand how different types of assets will be handled. In many cases, non-probate assets can provide benefits for loved ones and allow them to receive inheritances more quickly. However, probate assets may provide some other advantages, so it is important to consult with an experienced Dallas estate planning lawyer to determine the best options. At Andrew Dunlap Attorneys, PLLC, we can help you create an estate plan that will meet your family's needs. Contact us at 972-807-6357 to learn more about our estate planning services.

Sources:

https://www.americanbar.org/content/dam/aba-cms-dotorg/products/inv/book/402582144/chap_1_excerpt_5130245.pdf

https://www.mct.bank/ContentDocumentHandler.ashx?documentId=74033