Knowing the difference between probate and non-probate assets is important in estate planning. The probate process is when the court decides how to distribute your property upon your death, but there are some things that will not need to go through the probate process. They should pass directly onto your heirs. Our probate lawyer in Cary NC is here to discuss this and more.
Non-Probate Assets | Probate Lawyer in Cary NC
Over the next two posts, we will discuss probate and non-probate assets so that you will have a better understanding of these when you begin planning your estate and writing a will. First, let’s talk about the probate process and what it can mean for your family, and how your assets will be distributed.
The probate process is the legal procedure where final debts are settled and assets are passed onto family members or other beneficiaries. Because probate can be a lengthy and costly procedure, the easier you can make the process, the better it will be for your family and heirs. If someone is appointed as executor of your estate during the probate process, there are generally three steps he or she will have to take. First, an inventory of assets subject to probate are collected. Second, all bills and debts are paid or settled, which can include funeral expenses. Lastly, there is a formal transfer of property to the heirs according to the terms of the will.
If you have a will, you can appoint someone to take care of these responsibilities for you. If you do not have a will, the court will appoint someone. It is usually the surviving spouse or adult child of the deceased. If there is a dispute over who should take care of the estate, the court will appoint a neutral party. The probate process includes doing an assessment of probate assets. Items that are considered probate assets are things that are only owned by the deceased. They can include the following:
- Real estate that is in the deceased’s name only
- Personal property such as jewelry and furniture
- Automobiles, boats or other vehicles
- Bank accounts in the deceased’s name only
- Portions of a business or corporation owned by the deceased
- Life insurance policies
- Brokerage accounts
- Stocks, bonds
In addition, if the deceased has tenants in common property, where he or she owned property jointly, it is subject to probate.
When planning your estate, take into account which items are probate property and which are not. A will does not have say over how non-probate property is distributed so you may want to check the ownership of your accounts when writing your will. Also keep in mind that if you have life insurance policies or retirement funds that do not have a beneficiary named, they will be subject to probate. It includes 401(k)s, IRAs and annuities.
Klish and Eldreth, PLLC | Probate Lawyer in Cary NC
In the next part of the series on non-probate property, we will talk about what is included. There are six types that should not have to go through the probate process. This means that this type of inheritance should be passed onto the people who are designated as beneficiaries without having to go through the probate process. Stay tuned! Questions? Contact our probate lawyer in Cary NC.