Which Assets are Subject to Probate and Which Are Non-Probate Assets?
Part of what we do when we help someone prepare a comprehensive estate plan is have a discussion about which assets are to be distributed through the Last Will and Testament and which assets are to be distributed by other means. A properly drafted and executed estate plan should clearly delineate between probate and non-probate assets.
Whittling down assets makes probate easier for the executor
There are advantages to distributing property outside the probate process, including potential tax savings and easing the overall estate administration burden. The executor of an estate is only responsible for administering the assets which remain in the estate at the time of the testator's death.
Some assets which are generally not probate assets include:
- Life insurance proceeds — Life insurance proceeds do not pass by Will, unless the beneficiary of the life insurance policy was the estate of the testator, or all named beneficiaries are deceased. If another person or persons were named as beneficiaries, the proceeds go immediately to the beneficiary without being subject to the probate process.
- Trust property — Property used to fund a living trust or inter vivos trust is no longer part of the testator's estate, unless the estate is named as a remainder beneficiary of the trust. The property in the trust stays in the trust until its natural termination.
- Joint accounts with right of survivorship — Some accounts, such as checking, saving, money market and other financial accounts can be held by two or more people or entities with the right of survivorship. This means if one account-holder dies, the account immediately becomes the property of the survivors.
- Accounts with payable on death provisions — Many investment accounts and even regular bank accounts have payable on death provisions. A testator has the right to designate certain beneficiaries to receive ownership of the account without the property going through the probate process.
Get help sorting the assets and other estate administration duties
An experienced Brazos County probate attorney at Peterson Law Group efficiently guides executors and administrators through the probate process. Contact the Peterson Law Group today at 979-703-7014, or visit us online to learn more about being the executor of a Will in Texas.