Most people become involved in the probate of an estate at some point during their lives. Your involvement may be the result of being named, or volunteering, to oversee the probate of the estate of a loved one who passed away. You might also be named as a beneficiary, or be a legal heir, of the estate of a recently deceased family member. Regardless of the reason for your involvement in the probate of an estate, you will want to know as much as possible about the process. Knowledge about the probate process is also crucial to creating a successful estate plan for your own estate. As the Woburn probate attorneys at DeBruyckere Law Offices explain, one of the most important things you need to know about the probate process is which assets are subject to probate.
Why Is Probate Required?
When most people die, they leave behind an estate that consists of all assets, both tangible and intangible, owned by the decedent at the time of death. This includes things such as a real property, vehicles, and bank accounts along with investment accounts and household furnishings. Probate is the legal process by which those assets are identified, located, valued, and eventually distributed to the intended beneficiaries and/or legal heirs of the estate. During probate, all creditors of the estate must also be notified and afforded the opportunity to file claims against the estate. Those claims are reviewed, and approved claims must be paid out of estate assets. All federal and/or state gift and estate taxes must also be paid before assets can be distributed to the intended beneficiaries and/or heirs of the estate.
If the decedent left behind a valid Last Will and Testament, the individual named as the Executor in that Will is responsible for overseeing the probate process and the terms of that Will dictate how the estate assets are distributed. If the decedent died intestate (without a Will), someone typically volunteers to be the Administrator of the estate which entails essentially the same duties and responsibilities as an Executor. In an intestate estate, the state intestate succession laws will be used to determine the distribution of estate assets.
Which Assets Are Subject to Probate?
Whether you are probating the estate of a loved one, waiting on your inheritance to be distributed, or creating your own estate plan, one of the most important things to understand is the difference between probate and non-probate assets.
As the Executor or Administrator of an estate, one of the first steps you will need to take is to categorize assets as probate or non-probate assets because only probate assets are required to go through the probate process. Non-probate assets bypass probate altogether, meaning they can be distributed soon after the death of the owner. Likewise, when you are working on your own estate plan, you will want to do the same thing because the fewer probate assets you leave behind, the less exposure your estate has to the probate process.
Only an experienced probate attorney can review assets individually and tell with certainty whether they are probate or non-probate assets; however, as a general rule the following assets are not subject to probate:
- Assets held in a trust — most assets, including your home, can be held in a trust. Using a trust as your primary method for distribution of your estate assets can dramatically reduce the size and value of your probate estate.
- Proceeds of a life insurance policy – these proceeds often provide much-needed funds for surviving loved ones to pay bills and live on while the estate is being probated.
- Certain types of jointly held property — the key is that the property must be held jointly with rights of survivorship. Your interest in jointly held property with rights of survivorship will pass directly to the co-owner upon your death.
- Assets held in an account designated as “Payable on Death (POD)” or “Transfer on Death (TOD)” — allows you to designate a beneficiary who will automatically become the owner of the assets held in the account upon your death. Unlike jointly held assets, however, a beneficiary of a POD or TOD account has no ownership interest in the asset while you are alive.
- Certain retirement or pension accounts – IRAs and 401(k) accounts, for example, usually bypass probate and are distributed immediately to the named beneficiary.
Contact Woburn Probate Attorneys
For more information, please join us for one of our upcoming FREE seminars. If you have additional questions about the probate of an estate, contact the Woburn probate attorneys at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.
Yes. Assets distributed via your Will must go through probate whereas assets distributed using a trust bypass probate altogether.
Assets that are probate assets must go through probate. If you die intestate (without a Will), the state intestate succession laws will determine what happens to those assets.
Ultimately, you are responsible for overseeing the probate of the estate; however, most Executors/Administrators