Do You Know the Difference Between Probate and Non-Probate Property?
Understanding the difference between probate and non-probate property is an important part of estate planning. Probate is the court process that determines how a person’s assets and property will be distributed after death. Even with a will, probate is still required to settle the decedent’s estate. Certain assets are distributed directly to a person’s heirs (typically called probate assets) and other assets skip the court process and are distributed directly to the decedent’s beneficiaries (non-probate assets).
The question on most people’s minds when drafting an estate plan is what exactly is considered probate and non-probate assets? In general, people prefer to skip probate court altogether as the process can be expensive and timely. If you are planning your estate, the key is to have as many non-probate assets as possible.
Let’s take a look at the differences between the two categories.
Probate assets are anything that is owned solely by the decedent before death, and typically includes the following:
- Property titled solely in the decedent’s name or held as a tenant in common
- Property, such as jewelry, furniture, automobiles or other household items
- Bank accounts solely in the decedent’s name
- An interest or ownership in a partnership, corporation, or LLC
- Life insurance policies or brokerage account that list the decedent or estate as the beneficiary
Non-probate assets can include the following:
- Property held in joint tenancy or as tenants by the entirety
- Bank or brokerage accounts held in joint tenancy or with payable on death (POD) or transfer on death (TOD) beneficiaries
- Property held in a living trust
- Brokerage accounts or life insurance that list someone other than the decedent as the beneficiary
- Retirement accounts
When you are ready to begin setting up your estate plan, contact our expert attorney at Elder Law Services of California for a FREE consultation today! Our team will walk you through the entire process from drafting a will, living trust, powers of attorney, and any other documents you might need. Give us a call at (800) 403-6078. We look forward to speaking with you.
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