One purpose of estate planning is to make a plan for how your assets will be distributed after your death. If you do not have a plan, your estate could fall into probate, delaying your loved ones from receiving their inheritances for extended periods of time.
What Is Probate?
Probate is a legal process conducted by the court, where your assets are held up to ensure that all debts and taxes are paid. In addition, the court validates your will and makes sure there are no disputes. This process can take a very long time, depending on the size of the estate.
Which Are Non-Probate Assets?
Non-probate assets are immune from the probate process altogether. They fall directly into the beneficiary’s ownership with no need for court intervention.
Non-probate assets typically include:
1. Jointly-Owned Property: All assets that have living beneficiary's names on them will not enter probate. This could include a home, business, or bank account.
2. Beneficiary Designations: If you have retirement accounts or life insurance accounts that already have specified beneficiaries, the assets in the accounts are non-probate assets. You do not have to worry about the beneficiaries waiting and enduring probate before receiving funds from these accounts.
3. Revocable Living Trusts: Assets in a trust are not affected by the death of the grantor of the trust. The trustee will follow the instructions in the trust whether you are alive or deceased. Trusts are not affected by probate.
4. Gifts and Transfers Before Death: Assets gifted or transferred to new owners before death are typically considered non-probate assets.
Learning about non-probate assets will help in your estate planning efforts. For example, if you were to create a trust where you hold all your assets, your loved ones will have access to necessary funds as soon as you die.
Balancing Probate and Non-Probate Assets in Your Estate Plan
Create an estate plan with probate and non-probate assets. The more non-probate assets, the better. And your trusted attorney can help you design an estate plan that makes the most sense for your situation.
Contact an Attorney for Help
Understanding the difference between probate and non-probate assets is crucial for an efficient and effective estate plan. Utilizing non-probate assets can streamline the transfer of your wealth and provide your loved ones with a smoother process during an emotionally challenging time.
For more guidance on your estate planning needs, contact Miles & Hatcher, LLP, at (909) 481-4080 to schedule a free consultation with our knowledgeable and experienced estate planning attorneys. Take control of your legacy today and secure a better tomorrow for your loved ones.