When someone dies, their assets and debts need to be sorted out and the remaining assets have to legally be transferred and titled to the appropriate heirs, and probate is the process by which this happens.
However, not everything someone owns will pass through probate. Some assets can and do pass directly to the intended inheritor. Knowing the difference between what has to go through probate and what doesn’t can help testators craft a more effective estate plan and executors better understand their role.
What assets go through probate? What assets don’t?
Generally, assets that are titled solely in the deceased person’s name or have no designated beneficiary or joint owner will need to go through probate. These can include things like:
- Cars, trucks, boats and other recreational vehicles
- Real property, like a house or land, where there’s no right of survivorship
- Stocks, bonds and other investments that aren’t designed to transfer on death
- Bank accounts without a payable on death designation
- Personal property and collections, including art, coin collections and jewelry
It’s important to note that a will only controls the assets that go through probate. Non-probate assets include anything transfers directly to the intended heirs while bypassing the estate entirely. Typically, this includes things like:
- Property or other assets that are held in trust
- Any bank accounts with a payable on death (POD) designation
- Any property that has been given a transfer on death (TOD) designation
- Annuities and pension plans
- Property with survivorship rights
- Insurance policies with designated beneficiaries
Obviously, there are a lot of areas where there’s overlap. For example, a testator may have insurance policies where they’ve designated their estate as the beneficiary, which means those assets would then go through probate, after all.
Sorting through the complexities of an estate can be nearly impossible to do without appropriate legal guidance.