Are All Assets Subject to Probate?

What is probate? Probate is the court-supervised process of validating a decedent's will, paying off the decedent's debts, and ensuring that the decedent's assets go to the rightful beneficiaries named in the will. Or, in the absence of a will, to those who stand to inherit.

Probate varies slightly from state-to-state – many states offer a quicker, less expensive alternative for smaller estates. The decedent's probate estate is made up of all of the assets that he or she held at the time of death. Whether an estate is large or small, many ask, "Do all assets pass through probate?" Not necessarily.

What types of assets pass outside of probate?

Generally, only the assets that are held individually in the decedent's name will pass through probate. There are some assets such as investment accounts and retirement accounts which allow for beneficiary designations that transfer directly to beneficiaries without going through probate.

Assets usually not subject to probate:

• IRAs and 401(k)'s
• Property held in a trust
• Cash in bank accounts with transfer-on-death designations
• Proceeds from a life insurance policy
• Real estate with joint ownership with right of survivorship

Any asset that allows the owner to name a beneficiary does not typically go through the probate process, including most assets placed in trusts. So, if an asset names you as a beneficiary, you should be able to assume ownership sooner than if it was tied up for six months, a year, or even a year and a half in the probate court.

Even if a named beneficiary conflicts with the information in a will, the beneficiary designation supersedes a will. This means that the named beneficiary will receive the assets over the person who was named in the will.

If there is any doubt or dispute over the named beneficiary, then the question will be resolved through the probate court. If you have further questions, you should discuss them with an experienced probate attorney!