Day: April 1, 2023

Probate vs. Non-Probate Assets: What You Need to Know to Protect Your Estate & Heirs

When it comes to estate planning, it’s important to understand the difference between probate and non-probate assets. Probate is the legal process of administering a deceased person’s estate, which includes paying any outstanding debts and distributing assets to heirs. Non-probate assets, on the other hand, are assets that pass outside of the probate process. In this article, we’ll discuss the difference between probate and non-probate assets and what steps you can take to protect your estate and your heirs.

What are Probate Assets?

Probate assets are assets that are owned solely by the deceased person and that do not pass automatically to a named beneficiary. These assets must go through the probate process in order to be distributed to heirs. Examples of probate assets include:

  • Real estate that is owned solely by the deceased person
  • Bank accounts that are solely in the deceased person’s name
  • Personal property such as furniture, jewelry, and artwork
  • Business interests that are solely owned by the deceased person
  • Life insurance policies that are payable to the deceased person’s estate

What are Non-Probate Assets?

Non-probate assets are assets that pass outside of the probate process and that are typically distributed directly to named beneficiaries. Examples of non-probate assets include:

  • Jointly owned property with right of survivorship
  • Bank accounts that have a named beneficiary
  • Retirement accounts and pensions that have a named beneficiary
  • Life insurance policies that are payable directly to a named beneficiary
  • Trusts that have a named beneficiary

Why is it Important to Understand Probate vs. Non-Probate Assets?

Understanding the difference between probate and non-probate assets is important for several reasons. First, it can help you ensure that your assets are distributed according to your wishes. By naming beneficiaries for non-probate assets, you can ensure that these assets are distributed directly to the people you choose without going through the probate process.

Second, understanding the difference between probate and non-probate assets can help you minimize the time and expense of the probate process. By ensuring that as many assets as possible are non-probate assets, you can reduce the amount of time and money that your heirs will need to spend on the probate process.

How to Protect Your Estate and Your Heirs

Now that we’ve discussed the difference between probate and non-probate assets, let’s take a look at some steps you can take to protect your estate and your heirs:

Create a Comprehensive Estate Plan

The first step in protecting your estate and your heirs is to create a comprehensive estate plan that includes a will, trusts, and other important documents. Working with an experienced estate planning attorney can help ensure that your assets are distributed according to your wishes and that your heirs are protected.

Review and Update Your Estate Plan Regularly

It’s important to review and update your estate plan regularly to ensure that it remains relevant and effective. Changes in your personal life or in the law may require updates to your estate plan, so it’s important to review it at least once a year.

Name Beneficiaries for Non-Probate Assets

By naming beneficiaries for non-probate assets such as retirement accounts and life insurance policies, you can ensure that these assets are distributed directly to the people you choose without going through the probate process.

Consider Trusts

Trusts can be a valuable tool for protecting your assets and ensuring that they are distributed to your heirs according to your wishes. A trust can help you avoid probate, minimize estate taxes, and provide for the ongoing management of your assets after your death.

Consult an Experienced Estate Planning Attorney

Finally, it’s important to consult with an experienced estate planning attorney to ensure that your estate plan is comprehensive and effective. An attorney can help you understand the difference between probate and non-probate assets and can provide guidance on how to protect your estate and your heirs.

Conclusion

Probate and non-probate assets can have a significant impact on how your estate is distributed and on the amount of time and expense that your heirs will need to spend on the probate process. By understanding the difference between these two types of assets and taking steps to protect your estate and your heirs, you can ensure that your assets are distributed according to your wishes and that your loved ones are protected.

At Beasley & Ferber, our team of experienced estate planning attorneys can help you create a comprehensive estate plan that meets your unique needs and goals. We understand the complexities of probate and non-probate assets and can help you navigate the process with confidence. Contact us today to schedule a consultation and learn more about how we can help you protect your estate and your heirs.

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