What is the Difference Between Probate and Non-Probate Assets?

When planning your estate, it is crucial to understand the difference between probate and non-probate assets. This distinction determines how your assets will be managed and distributed after your death. At Lawvex, we specialize in probate matters in California and are here to help you navigate these complexities.

What Are Probate Assets?

Probate assets are those held solely in the name of the decedent at the time of their death. These assets do not have a designated beneficiary or joint owner. Examples of probate assets include:

• Bank accounts held solely in the decedent’s name
• Real estate titled solely in the decedent’s name
• Personal property such as jewelry, vehicles, and other tangible items
• Stocks and bonds held in the decedent’s name without a beneficiary designation

Probate assets must go through the probate process, which involves a court-supervised procedure to validate the will, pay debts, and distribute the assets to the rightful heirs. This process is managed by a fiduciary executor or administrator, who is appointed by the court if there is no will.

What Are Non-Probate Assets?

Non-probate assets bypass the court process and pass directly to the designated beneficiaries upon the decedent’s death. These assets are transferred through mechanisms established by law or contractual agreements. Common types of non-probate assets include:

• Jointly owned property with rights of survivorship, such as a house owned by a husband and wife
• Joint bank accounts, where the surviving account holder automatically becomes the owner
• Assets with designated beneficiaries, such as life insurance policies, IRAs, and retirement accounts

For instance, if a husband and wife own a house together and the husband dies, the house automatically belongs to the wife. Similarly, if you have a life insurance policy that names a specific beneficiary, that person will receive the policy proceeds, regardless of what your will says.

The Importance of Regular Review

It’s important to regularly review your non-probate assets to ensure they align with your overall estate plan. Since these assets are not controlled by your will, they should be consistent with the rest of your estate planning documents. For example, if your will states that you want a particular person to receive your assets, but your life insurance policy names a different beneficiary, the beneficiary designation will take precedence.

By periodically reviewing and updating the beneficiaries on your non-probate assets, you can avoid potential conflicts and ensure that your estate plan reflects your current wishes. This is particularly important in cases of major life events, such as marriage, divorce, the birth of a child, or the death of a beneficiary.

Why Choose Lawvex?

Navigating the complexities of probate and non-probate assets can be challenging. At Lawvex, our expertise in California probate law allows us to provide you with comprehensive guidance and support. We help you understand how your assets will be distributed and ensure that your estate plan is tailored to your unique needs.

By clearly distinguishing between probate and non-probate assets and keeping your beneficiary designations up to date, you can create a cohesive estate plan that honors your intentions and provides for your loved ones. Contact Lawvex today to learn more about our probate services and how we can assist you in securing your legacy.