Subject to Probate- Just about every individual leaves behind some assets that aren’t required to go through probate. Even when you do carry out probate court proceedings for your estate, not everything will need to be included. That’s excellent news, since property that does not have to go through probate may be distributed to the individuals that inherit it much more fast.
Assets That Typically Go Through Probate
Assets That Typically Aren’t Required to Go Through Probate
In the probate process, a significant portion of an estate’s assets often bypasses formal proceedings. This can occur when the deceased individual, through marriage or proactive measures, has jointly owned assets or taken steps to avoid probate.
1. Retirement Accounts with Designated Beneficiaries
2. Life Insurance Returns
3. Payable on Death Financial Institution Accounts
4. Living Trust Assets
Assets placed in a living trust are generally excluded from probate requirements.
5. Securities with Transfer on Death Designations
Securities certified with transfer on death (TOD) documentation avoid probate proceedings.
6. US Savings Bonds with Payable on Death Designations
US savings bonds certified with payable on death (POD) documentation bypass probate requirements.
7. Jointly-Owned US Savings Bonds
US savings bonds held jointly are not subject to probate in certain situations.
8. Real Estate with Authentic Transfer on Death Document
Real estate with a valid transfer on death (TOD) document—permissible only in some states—avoids probate.
9. Designated Wages, Salaries, and Commissions
Up to a specific amount, wages, salaries, and commissions owed to the deceased person are typically exempt from probate.
10. Pension Plan Allocations
11. Jointly-Owned Property with Right to Survivorship
Property held in joint ownership with the right to survivorship is exempt from probate in applicable situations.
12. Community Property with Right to Survivorship
13. Vehicles or Boats with Transfer on Death Designations
Vehicles or boats registered with transfer on death (TOD) documentation—allowed only in certain states—bypass probate.
14. Vehicles Passing to Next of Kin under State Laws
Certain states exempt vehicles that pass to the next of kin under state laws from probate requirements.
15. Household Items and Assets Passing to Next of Kin
Certain assets, like household items directed to next of kin under state laws, can sidestep probate. Moreover, numerous states facilitate a streamlined probate, often termed “summary probate,” tailored for lower-value estates. This expedited process becomes applicable when probate-dependent property falls below state-specific thresholds—ranging from a few thousand dollars to $200,000 in different jurisdictions. This proves especially advantageous for estates with substantial non-probate assets.
By prioritizing probate-required property and excluding co-owned or trust-allocated assets, even sizable estates benefit from “small estate” procedures. Consider an estate with a $500,000 co-owned house, a $150,000 POD-designated bank account, a $120,000 IRA, and a $10,000 solely owned vehicle—totaling over $770,000. Despite the overall value, it may qualify for “small estate” procedures due to the vehicle’s probate eligibility, a common scenario across states, streamlining the probate process efficiently.
Source
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Mary Randolph, J. (2020, October 12). What Assets Must Go Through Probate? Retrieved November 23, 2020, from https://www.alllaw.com/articles/nolo/wills-trusts/what-assets-go-through-probate.html
