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When a person passes away, their assets are ordinarily distributed according to the terms of their will through probate court. With that being said, not all assets are required to go through this process. Obvious assets which need to go through probate are those that are titled in your name only, such as vehicles, property, investments, and more, as only the probate court can remove your name from an asset’s title after your death.
Assets which generally do not have to be probated include:
- Jointly owned assets: Assets which are owned jointly, such as with a spouse, will automatically transfer to the surviving owner in the event of your death without the need for probate. If the surviving owner dies without adding another owner, or if both owners pass at the same time, it must be probated before it can be distributed to heirs.
- Assets with a valid beneficiary designation: Certain assets such as insurance policies, IRAs, bank accounts, and retirement plans allow you to name a beneficiary to inherit the funds. If an asset has a valid beneficiary designation, it will only need to go through probate if 1) the chosen beneficiary dies before you or at the same time, 2) the beneficiary is incapacitated, or 3) if the named beneficiary is a minor.
- Assets held in a trust: Assets which are held in a trust, such as a revocable living trust, will not be required to be distributed in probate. With that being said, testamentary trusts established in your will are not exempt from probate. Likewise, any assets left out of your living trust will likely still need to be probated.
How Can Avoiding Probate Be Beneficial?
Though necessary in many situations, probate can be a notoriously complex and costly process, oftentimes placing a heavy burden on a person’s family after they have passed. Probate court can tie up property for months or even years, along with court fees that can take up to 5% of an estate’s value. For this reason, setting up an estate plan which reduces or eliminates the need for probate can end up being a great gift to your family.
At Davidov Law Group, our Nassau County estate planning lawyers have been helping individuals avoid probate with effective and strong legal counsel for more than 25 years. To find out more about how our team of advocates can help you plan for your future, contact our office online or call us today at (516)-928-6594.
