Probate vs. Non-Probate Assets

Probate vs. Non-Probate Assets are critical as you approach probate court for estate settlement. The more non probate property, the faster and less costly probate becomes.

Everything you own at the time of your death will be transferred to your heirs. However, not all your property will pass through probate. For example, when Chase B. died, he left behind property that included two homes, three cars, several retirement accounts, a thriving business, and a saltwater fishing boat. The personal representative of his estate started gathering Chase’s property, only to learn that some assets were non-probate assets. When it comes to probate vs. non-probate assets, keep the following in mind:

Property Titles Make a Difference

The way property is titled may answer the probate vs. non-probate question. This applies to property including but not limited to real estate. The following types of ownership may determine whether property will pass through probate:

  • Joint Ownership. People may own property with another person, titling the property as joint tenants with right of survivorship (JTWROS), as a tenancy in common, and as tenancy by the entirety. Property that is jointly owned may pass to the other owner or owners without the need for property. However, in some cases, one owner’s interest may be passed through their estate and, as such, become a probate asset.
  • Life Estate Deeds. With a life estate deed, the owner transfers property to beneficiaries called remaindermen. The owner has limited control over the property. The remaindermen take possession of the property after the owner’s death. Probate generally is not needed.
  • Lady Bird Deeds. Also called an enhanced life estate deed, a Lady Bird Deed differs from a life estate deed because the owner continues to control the property during his or her lifetime. When the owner dies, the property is transferred to the beneficiaries named in the Lady Bird Deed.
  • Beneficiary Deeds. This type of deed transfers property to the new owners or beneficiaries, but not until the owner has died. This property does not become a probate asset.

Beneficiary Designations Matter, Too

Financial institutions and insurers offer accountholders the chance to name who will receive funds remaining in their accounts after they pass away. Beneficiary designations should be considered during estate planning. Accounts with beneficiary designations pass directly to the beneficiaries without the need for probate.

Trusts – Part of the Probate vs. Non-Probate Debate

Assets that are used to fund trusts generally do not become probate assets. Instead, the assets may pass directly to the beneficiaries or continue to be managed by the trustee.

Probate vs. Non-Probate Assets Make a Difference in Your Estate

Attorney John Mangan is board certified in Wills, Trusts & Estates by the Florida Bar. Please call us at 772-324-9050 or use our Contact Form to set up an appointment. We help clients throughout Florida, including Stuart, Palm City, Hobe Sound, Jupiter, and Port St. Lucie.