Whenever you own assets, there will be some of these assets that are likely be subject to probate after you are deceased. These types of assets are known as probate assets and must go through probate. The reason why your estate must go through probate is so that the will can be determined to be legitimate, all of your remaining debts are paid, and then the assets will be transferred out of your name and into the name of your heirs.
Probate will cover any assets that are yours exclusively; this would include any property that is only in your name, business interests, vehicles, as well as any financial accounts. If you have any assets that are owned jointly with someone else through a tenant in common, then the deceased’s percentage of ownership will be considered part of their estate and will be subject to probate.
If you have retirement accounts, annuities, and other types of accounts that would normally pass to the beneficiary outside of probate, but have failed to name a beneficiary, these will also go into probate. In the case where the named beneficiary has preceded you in death and you did not update the beneficiary, the accounts will go into probate.
In the event that you have funded these assets to a trust, they will then be exempt from probate due to the fact that you will not technically own these assets; therefore they are not part of your estate. This is why it is important that you consider including a Living Trust as part of your estate plan. A trust will help to keep these types of assets out of probate.
If you are unsure which of your assets would be considered probate assets, you will want to consult with an attorney that is experienced in estate planning and probate issues. An attorney can advise you on which assets will go into probate when you die, and how you can avoid this.
Taking the time to create an estate plan that keeps your assets out of probate will be very beneficial to your loved ones when you are gone.
Duffy Law Office is a member of the American Academy of Estate Planning Attorneys.