Probate refers to the legal process by which a person’s assets, or “estate,” are distributed to heirs or beneficiaries following his or her death. If the deceased individual has a Will, it is admitted to probate by the court, which then appoints a Personal Representative to distribute the assets of the estate. Some assets must pass through the probate process in order to reach their intended beneficiaries. Other assets, however, are classified as non-probate assets, which means that they pass to their beneficiaries outside the probate process.
Probate assets generally refer to all assets owned by the deceased individual at the time of his or her death. Some examples of probate assets include:
- Bank accounts, brokerage accounts, stocks, and bonds, so long as they are not held jointly or payable on death to a designated beneficiary
- Any interests in real estate, unless it is held jointly or subject to a transfer on death deed
- Any interests in vehicles, boats, and airplanes
- *Life insurance policies with the deceased or the estate listed as beneficiary
- *IRAs with the deceased or the estate listed as beneficiary
- All personal property
*Notably, adverse consequences can arise from naming the estate the beneficiary of life insurance or retirement accounts.
Non-probate assets, on the other hand, distribute automatically to the named beneficiary or joint owner upon the individual’s death. These assets will never be included in a person’s estate that must go through probate. Some common examples of non-probate assets include the following:
- Checking or savings accounts held jointly with rights of survivorship
- Life insurance policies with a named beneficiary other than the estate
- Any property held in trust
- Retirement accounts and pensions with a named beneficiary other than the estate
However, it is important to keep in mind that even non-probate assets are part of the deceased individual’s taxable estate.
Aging is inevitably a part of life, and as a result, you should take steps to adequately handle your financial and personal affairs, including your assets, when you are able to do so. Whether your comprehensive estate plan includes a Will, a trust, or a combination of the two, you need to get the optimal plans for your situation into place well before you need them. Call Elder Law Group PLLC today at (509) 468-0551, or contact us online at www.elderlawgroupwa.com in order to schedule a time to meet with one of our Washington and Idaho Estate Planning attorneys, and see how we can help.