WHAT IS PROBATE PROPERTY?
Probate property is any property that is governed by your Will (or is subject to a court administration if you do not have a Will),and that you own in your individual name, such as stocks, bonds, cash, certificates of deposit, or real estate. Probate property must be distributed in accordance with your Will or in accordance with the laws of intestate succession if you do not have a Will. If you do not have a Will, the court will name someone to administer your probate estate ( an “Administrator”) and make sure that your property passes to the correct beneficiaries.
Some examples of non-probate property are jointly-owned assets, life insurance, retirement benefits and accounts that are “payable on death”. Jointly-owned d property passes automatically (by “operation of law”) to the surviving joint tenant. Life insurance and retirement benefits will pass to whomever you have designated on the beneficiary designation forms. (If you do not designate someone then your life insurance and retirement benefits will pass to your estate and become probate assets). Accounts that are “POD” or “held for the benefit of …” with a bank or mutual fund will pass to whomever you have named.
Just because an asset is not a probate asset does not mean that it is not part of your taxable estate. Any property, whether it is probate or non-probate, must be taken into account to determine if you have a taxable estate.
Other Frequently Asked Questions:
What is an estate plan?
What is a taxable estate?
What is probate property?
What is probate administration?
Who should have an estate plan?
How can my estate plan lower the federal transfer tax liability?
How can I plan for long term care and disability of a child or adult?