When a loved one passes away, dealing with the assets they left behind can be a confusing task. One of the most crucial aspects of estate planning is understanding the difference between probate and nonprobate assets. If you were the assigned executor of their estate plan, familiarizing yourself with these legal concepts would help make the probate process more efficient.
What are probate assets?
Probate assets are those solely owned by the deceased person. These assets are those that are still named to the deceased upon their death or do not have a designated beneficiary. Therefore, they must go through the probate process, which involves validating the will, paying debts and taxes and distributing assets to the heirs. Some examples of these assets are:
- Real estate owned solely by the deceased
- Bank account in the deceased’s name
- Personal property, such as jewelry, art or furniture without a named beneficiary
These assets are subject to the probate process after an individual’s passing. These assets are typically distributed according to the deceased’s will or the state’s intestate succession laws if there is no will.
What are nonprobate assets?
Nonprobate assets, on the other hand, do not need to go through the probate process. These assets typically pass directly to the beneficiary or joint owner. Some examples of nonprobate assets are:
- Jointly owned real estate or bank account
- Life insurance policies with a named beneficiary
- Retirement accounts with a named beneficiary
- Trust assets
These assets can bypass the probate process, expediting the transfer and providing a sense of comfort for the beneficiaries.
Why is it important to know the difference?
As an executor of a will, understanding the difference between probate and nonprobate assets can simplify your responsibilities. This knowledge can help you manage your loved one’s estate more efficiently, making the process of settling their affairs less complex and potentially less costly. Knowing how to manage these assets can help you navigate the probate process with more confidence, ensuring that you carry out your loved one’s wishes as they intend.
The importance of seeking legal guidance
Understanding the difference between probate and nonprobate assets is a key part of estate planning and administration. However, estate laws can still be complex. This is where the guidance of legal professionals can be valuable. An experienced estate law attorney can provide you with personalized advice based on your circumstances.