Does All of a Person's Property Have to Go through Probate?
The short answer to this question is no, but a more accurate answer is it depends on whether the deceased wanted to avoid probate for some assets and, if so, how much advance planning was done. A well-structured, comprehensive estate plan can take advantage of legal tax savings and transfer property to intended recipients over time, ensuring property reaches beneficiaries while minimizing the expense associated with probating a large estate.
Many assets can be transferred prior to or immediately upon death
Estate property is everything you own at the time of death. If you are in the planning phase, think about which assets can be transferred ahead of time – either to a trust or to the intended beneficiary. You should also identify assets which can be transferred at the time of death without becoming part of your estate. Transferring at least some of your property outside the probate process will help ease the burden and cost of estate administration.
Easy ways to bypass probate
Certain assets are normally excluded from a person's estate because ownership passed either during the deceased person's lifetime or immediately upon death, such as:
- Life insurance — Because death triggers payout directly to the beneficiary of a life insurance policy, the money belongs to the beneficiary upon death of the insured. Exceptions occur if the insured person named his or her estate as the beneficiary of the policy or if the named beneficiaries predeceased the insured.
- Joint accounts with right of survivorship — Checking, savings, money market and other types of financial and investment accounts can be held by two or more owners with the right of survivorship. The account immediately becomes the property of the survivors upon the death of one of the account holders.
- Accounts with payable on death provisions — Payable on death, or POD, provisions are different than joint ownership accounts, but have the same effect upon the death of an account holder, so the account bypasses probate.
- Trust property — Any property transferred to a trust during a person's lifetime is not party of the person's estate after death, unless the estate is a named remainder beneficiary.
Define probate and non-probate assets today
Our experienced Brazos estate planning and probate attorneys at Peterson Law Group explain the probate process and help clients develop efficient plans to meet future goals, including avoiding probate when possible. Contact Peterson Law Group today at 979-703-7014, or visit us online to arrange an appointment.