Which Assets Go Through Probate?

Definition of Probate Assets

When a loved one passes away, their estate often goes through a legal process known as probate. Probate assets are essentially the pieces of the estate that are subject to this process, as they were owned solely by the deceased at the time of their passing.

These assets can range from real estate and bank accounts to personal possessions, and they all share the commonality of requiring official legal proceedings to transfer ownership to the beneficiaries. This process ensures that all debts and taxes are paid before the remaining assets are distributed according to the deceased's will—or, if there's no will, according to state law.

Types of Assets Subject to Probate

Several types of assets routinely find their way into the probate process. Real estate solely in the deceased's name, personal items like jewelry, art, and vehicles, and individual bank accounts without a payable-on-death designation are prime examples.

Other assets include stocks and bonds held in solely owned accounts and business interests without transfer-on-death arrangement. Understanding which assets are likely to go through probate is crucial for estate planning and can significantly affect the ease with which beneficiaries receive their inheritance.

Non-Probate Assets and Transfer Mechanisms

Jointly Owned Property

Not all assets need to endure the probate process. Jointly owned property, for instance, often transfers directly to the surviving owner without probate. This is due to a legal concept known as the right of survivorship, which allows the property to bypass the often lengthy and costly probate proceedings. This mechanism is a cornerstone of estate planning for married couples and business partners, ensuring that property seamlessly transitions to the co-owner upon one's death, thus offering peace of mind and financial stability during a challenging time.

Payable-On-Death and Transfer-On-Death Accounts

Similarly, payable-on-death (POD) and transfer-on-death (TOD) accounts provide a straightforward way to pass assets to beneficiaries without them getting entangled in the probate process. By designating a beneficiary, or multiple beneficiaries, the account owner can ensure that funds from bank accounts, retirement accounts, and even securities are transferred directly upon their death. These designations are simple to set up and can be a powerful tool in estate planning, allowing for a swift transfer of assets and minimizing the emotional and financial strain on loved ones.

Strategies to Avoid Probate

Many individuals seek to avoid probate due to its public nature, potential cost, and the time it can take. Estate planning techniques such as the creation of living trusts, designating beneficiaries on accounts, and gifting assets while still alive are all effective strategies to circumvent the probate process. Trusts, in particular, can offer a high degree of control over how and when assets are distributed, and they remain private, unlike a will which becomes a public document once it enters probate. Careful planning with these tools can not only simplify asset transfer but also provide tax benefits and protect your privacy.

Contact Our Attorneys at Owenby Law, P.A.

At Owenby Law, P.A., we understand your challenges and are dedicated to providing the guidance and support you need to ensure your estate is managed according to your wishes. Whether you're looking to understand probate assets, avoid probate, or require assistance with estate planning, our experienced attorneys are here to help.

Don't leave your estate planning to chance; contact us today at our Jacksonville office to secure your legacy and provide peace of mind for your loved ones. (904) 770-3141