Non-Probate Assets Can Be a Good Thing

Which Assets Can I Use to Avoid Probate?

Information provided by Attorney Bonnie Klein Rhoden.

Probate is an important step to protect your children.

A failure to plan is a plan to fail! Don’t delay.

Non-probate assets consist of all the property that won’t need to go through the probate process rather this property will pass by operation of law or directly to your heirs. Turning your assets from probate to non-probate property is easy and can help you avoid probate all together or can keep your probate estate small (thereby keeping fees down). Non-probate property is usually available to beneficiaries in a short time after your death and often require only a death certificate and the beneficiary’s I.D. to grant access to the proper beneficiaries. An experienced probate attorney at this firm can and will help you determine which assets you can maintain and eventually pass on as non-probate assets.

A Word of Caution About Non Probate Property

While you may have heard from friends or family (or even other non-lawyer professionals) that avoiding probate is the best route for your estate plan. But property that is passed using non probate methods may end up with creditors of the beneficiaries.

For example, many people believe adding a child or friend to the bank account is a good way to avoid having to probate that account. But, there are many considerations and liabilities if you do this. Take a bank account owned jointly with another person (such as one of your children) but you have three kids and two grandkids that you want to share those funds – that account will go 100% to the child listed on the account regardless of what you wanted or even what your Last Will may say. That child has zero duty to share that account or the funds with anyone! Even worse is if the child you are sharing the account with has an issue (car wreck or other financial woe) a creditor may proceed to collect against YOUR account because the child’s name is on it.

There are a number of ways to hold assets as non-probate property, here are some examples:

Types of Non Probate Assets

If you are married and you own property with your spouse you may be able to utilize the protections of holding that property as “tenants by the entirety”. This is a specialized form of joint ownership and will avoid probate when you or your spouse dies. Remember, if your spouse passes first this special status is no longer available and you should consult with your excellent probate attorney at Rhoden Law Group serving Rockledge, Eau Gallie, and Melbourne (along with the rest of Brevard County).
Joint ownership is a form of owning property with another person (such as your spouse, a child, a brother/sister, etc.) that allows you to use “right of survivorship”. This right must be properly identified on the ownership documents such as on a specialized deed in order to pass the property to the joint owner upon your death or to you upon his/her death. This type of ownership avoids probate.
Using a Pay on Death or Transfer on Death designation can allow you to transfer monetary assets to a beneficiary or multiple beneficiaries upon your death. You may also use this form of ownership to pass accounts directly to a family trust.
If you have a trust then most assets that are held as assets of the trust entity will likely avoid probate. There are always exceptions to a rule but typically you can presume a trust asset will not require probate to pass to your heir. Creditors can and do invade trust assets after a person passes but this is the less usual situation.
If you have a life estate in a particular asset and the asset is set to pass to remaindermen or remainder beneficiaries that is/are NOT a charity and is not yourself (such as real property) those assets will pass upon your death outside of probate.
If your portfolio has assets in your name (even individually) that are set up with a beneficiary designation those assets will pass without probate. These types of assets may be accessible to your creditors after your death. These types of assets are typically an individual retirement account (IRA) or a 401(k) account or annuities.

Set up an appointment to review your current plans for passing your assets upon death and for incapacity with us – such reviews are a courtesy. The experienced, patient, compassionate estate planning and probate lawyer, Bonnie Rhoden, will help you understand which assets pass in probate and which may not. Call or text us today 321-549-3162 or email using the contact feature on this site.