When planning your estate it is important to understand the difference between probate and nonprobate assets. Probate is the process through which a court determines how to distribute your property after you die. Some assets are distributed to heirs by the court (probate assets) and some assets bypass the court process and go directly to your beneficiaries (nonprobate assets).
The probate process includes filing a Will and appointing a Personal Representative, collecting assets, paying bills, filing taxes, distributing property to heirs, and filing a final account. This can be a costly and time-consuming process, which is why some people try to avoid probate by having only nonprobate assets.
Probate assets are any assets that are owned solely by the decedent. This can include the following:
* Real estate that is titled solely in the decedent's name or held as a tenant in common;
* Personal property, such as jewelry, furniture, and automobiles;
* Bank accounts that are solely in the decedent's name;
* An interest in a partnership, corporation, or limited liability company;
* Any life insurance policy or brokerage account that lists either the decedent or the estate as the beneficiary.
Nonprobate assets can include the following:
* Property that is held in joint tenancy or as tenants by the entirety;
* Bank or brokerage accounts held in joint tenancy or with payable on death (POD) or transfer on death (TOD) beneficiaries;
* Property held in a trust;
* Life insurance or brokerage accounts that list someone other than the decedent as the beneficiary;
* Retirement accounts.
When planning your estate, you need to take into account whether property is probate property or nonprobate property. Your Will does not control the distribution of nonprobate property. Check the ownership of your property and your accounts to make sure jointly owned property will be distributed the way you want it to. It is also important to review your beneficiary designations.
If you have questions about determining whether your property is being distributed the way that you want it to, contact us at 253.858.5434 to set up an appointment. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.