The most basic definition of estate is everything you own. This includes tangible items like a house, car, boat and furnishings. It also includes intangible items like investments, bank accounts, 401K’s and IRA’s. When defining your estate for planning purposes there are two categories of assets. They are probate and non probate. Probate assets are assets that come under the jurisdiction of the court at the time of your death. Non-probate assets are those that do not come under the jurisdiction of the court.
Non probate assets are most commonly created with beneficiary statements. Banks and other financial institutions have patrons complete beneficiary statements when they open new accounts. Beneficiary statements are also completed for 401K and other pension and retirement plans. Life insurance policies also require beneficiary statements. These statements direct the institution to transfer ownership of the account upon your death to a particular person, company, trust or other entity.
Probate assets are often titled items such as a house, car or boat. A legal procedure of some type is required to transfer ownership from one person to the next. However, assets with beneficiary statements that are incomplete or where the probate estate is named as the beneficiary are probate assets as well.
Proper planning is the key to transferring both probate and non-probate assets. The easiest way to ensure a smooth transfer of probate assets is with a will or trust. These documents clearly identify who should have the ownership, use or access to the assets upon your death. Non probate assets can be transferred more quickly since no legal procedure is required. However, this transition depends on current, accurate beneficiary statements.
Law Offices of Debbie J. Cunningham
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