5 Assets That Avoid Probate: What You Need to Know
When someone passes away, their assets are usually subject to probate, which is the legal process of settling their estate. However, not all assets are considered part of a person’s probate estate. In this article, we’ll explore 5 types of assets that are not subject to probate.
- Assets with a designated beneficiary: Assets such as life insurance policies, retirement accounts, and payable-on-death bank accounts typically have a designated beneficiary. These assets will pass directly to the named beneficiary without going through probate.
- Jointly owned assets: When someone owns property or assets jointly with another person, such as a joint bank account or joint tenancy in real estate, the property will pass automatically to the surviving owner upon the other owner’s death. This type of property is not subject to probate.
- Assets held in trust: When someone creates a trust, they transfer assets into the trust and designate a trustee to manage the assets. The trust will dictate how the assets are distributed upon the person’s death, and they will not be subject to probate.
- Gifts: If someone gives away assets prior to their death, those assets are not subject to probate. However, it’s important to note that there may be gift tax implications for large gifts.
- Property subject to a transfer-on-death deed: In Florida, a transfer-on-death deed is a legal document that allows property to pass directly to a designated beneficiary upon the owner’s death. This type of property is not subject to probate.
It’s important to note that while these assets may not be subject to probate, they still need to be accounted for in a person’s estate plan. It’s important to work with an estate planning attorney to ensure that all assets are properly titled and accounted for in a person’s estate plan.
In summary, not all assets are subject to probate. Assets with designated beneficiaries, jointly owned assets, assets held in trust, gifts, and property subject to a transfer-on-death deed are among the types of assets that are not part of a person’s probate estate. Working with an estate planning attorney can help ensure that all assets are properly accounted for in a person’s estate plan.
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Florida Probate Code: Chapter 731 – Disposition of Personal Property on Death
Nolo: What Assets Are Not Probate Assets?