Probate assets are those that are subject to the probate process upon the owner’s death. These typically include assets solely owned by the deceased person, such as real estate, bank accounts, vehicles, and personal belongings. Non-probate assets, on the other hand, are assets that pass directly to beneficiaries without going through the probate process. Common examples of non-probate assets include:
- Jointly Owned Property: If an asset is owned jointly with rights of survivorship, it automatically transfers to the surviving owner(s) upon one owner’s death.
- Beneficiary Designations: Assets like life insurance policies, retirement accounts, and payable-on-death (POD) accounts allow the account holder to designate beneficiaries who will receive the assets upon their death.
- Living Trusts: Assets placed in a living trust are managed by a trustee during the owner’s lifetime and seamlessly transferred to beneficiaries upon the owner’s death, avoiding probate.
Understanding the distinction between probate and non-probate assets is essential for effective estate planning, as it can impact the distribution of assets and the timeline of the process.