Depending on how you set up your estate, some of your assets may be subject to go through probate when you pass away. This depends on how the titles to the property are held and whether you’ve already designated a beneficiary using the proper legal forms for each type of account and asset class.
The most common items that end up in probate court include:
- Property owned solely in the name of the person that died, such as a home or vehicle.
- Any property the deceased person had as “tenants in common” such as an investment property shared with a group.
If the estate is small (this value depends on the state you live in, ranging from a few thousand dollars to $200,000), many states offer a simplified probate process. Even families with an estate worth much more than the limit for this simplified process, if the estate is structured properly, there may be only a few items that need to go through this type of probate.
Assets Not Subject to Probate
There are several assets that will not need to go through probate, and other assets that could be subject to it, but with a little planning, could avoid it altogether. For example, if you name a beneficiary for your retirement accounts, those will immediately go to that named person. Unless an estate is named as the beneficiary of a life insurance policy, the proceeds will go directly to the heirs that are named.
As well, anything held within a living trust is not subject to probate because it is taken out of your name and, on paper, is owned by the trust. Another exception to probate is jointly owned real estate, which goes directly to the other owner, such as your spouse.
Other assets that can avoid probate include:
- Money in a payable-on-death bank account
- Securities and bonds registered with the proper transfer-on-death or payable-on-death forms
- Savings bonds that are co-owned
- Real estate with a transfer-on-death deed, which is only applicable in some states
- Pension distributions
- Wages or salary owed to the deceased
- Vehicles and boats registered properly, which is also only allowed in some states
Protect Your Estate
With a well-planned estate, your assets will remain protected and away from probate court, lengthy court proceedings, legal fees, and the public record. Save your family unnecessary stress and speak with a probate attorney in Allentown, PA to ensure your estate is set up in the most beneficial way for your heirs.