In the world of estate planning, the distinction between “non-probate” and “probate” assets is important. Your “non-probate assets” will pass directly to your beneficiaries without Court involvement. On the other hand, the Court will direct the distribution of your “probate assets” to your beneficiaries based on your Will, or to your heirs if you die without a Will.
A non-probate asset has a label that states what should happen to it upon your death. Specifically, the nature of your ownership interest in the asset or your beneficiary designation on the asset controls its distribution. Consequently, non-probate assets are not controlled by your Will. Examples of non-probate assets include the following:
- Property held in joint tenancy with rights of survivorship
- Bank or brokerage accounts held in joint tenancy or having payable on death (POD) or transfer on death (TOD) beneficiaries
- Life insurance or brokerage accounts that list someone other than the decedent or estate as the beneficiary
- Property held in a trust
- Retirement accounts
Probate assets include those assets owned solely by you. The distribution of probate assets can be controlled in your Will. Examples of probate assets include the following:
- Real property that is titled solely in the decedent’s name or held as a tenant in common
- Personal property, such as jewelry, furniture, and automobiles
- Bank accounts that are solely in the decedent’s name
- Any life insurance policy or brokerage account that lists either the decedent or the estate as the beneficiary
When planning your estate, you should identify what probate and non-probate assets you own and determine how you want those assets to be distributed among your beneficiaries. For all of your assets, your goal should to make an informed decision about how your assets will be distributed.
This blog post is intended only to be informative and is not a substitute for comprehensive legal advice. For legal advice on your estate planning needs, please call our office at (319)260-2096 or e-mail one of our attorneys!