Your Will governs only those assets which fall within the probate estate. Accordingly, the probate estate is subject to administration by a probate court. However, there are many assets that are not part of the probate estate--they are not distributed by a Will and thus not subject to the probate court.
Not long ago I discussed property that's ordinarily not distributed by a Will. To follow up on that, I decided to post this quick list of which assets are--and aren't--disposed of by a Will.
Below is a brief outline of the types of assets that generally fall into each category. This list is by no means exhaustive, but it covers the more common items.
Probate Assets (Distributed by Will):
- Real property titled in the decedent's name only or property in which the decedent is a tenant-in-common with other persons. This includes homestead, vacation property, business and rental properties.
- Personal property.
- Funds in bank accounts.
- Beneficiary assets with predeceased beneficiaries or no beneficiary designations.
- An interest in a partnership, corporation, or limited liability company.
- Assets left out of a trust.
- Financial instruments that name the decedent or the decedent's estate as beneficiary.
- Any other assets titled solely in the decedent's name.
Non-Probate Assets (Not Distributed by Will):
- Real property titled jointly or subject to a transfer on death deed (TODD).
- Bank account funds jointly owned or subject to a payable on death (POD) provision naming someone else.
- Financial instruments with designated beneficiaries, such as life insurance policies, pension funds, investments, etc.
- Motor vehicles registered with a POD provision in the titles.
- Property held in a trust.
Avoiding Probate.
Administration by a probate court may be avoided in cases of certain small estates. This may be accomplished by executing a transfer on death deed for your real property. If the aggregate value of your remaining personal property is less than $75,000, probate may not be necessary. Setting up POD provisions on bank accounts and motor vehicle titles may enable you to lower the remaining probate estate value below that maximum.
A qualified estate planning attorney can help you sort through your assets and develop a strategy for preserving them for your loved ones.