A probate estate consists of all the assets owned solely by a person at the time of their death that do not pass automatically to a beneficiary or co-owner. These assets are subject to the legal process known as probate, where a court oversees the administration of the estate, ensuring debts are paid and remaining assets are distributed according to the terms of the deceased’s Last Will and Testament (or state law if no Will exists).
What Assets Are Included in the Probate Estate?
Examples of assets that are typically part of the probate estate include:
Individually Owned Assets:
Bank accounts (that do not have a named beneficiary), investments, or real estate titled solely in the deceased person’s name.
Personal Property:
Items like jewelry, vehicles, artwork, and collectibles not held in a trust or jointly owned.
Assets Without Beneficiary Designations:
Accounts or policies where no beneficiary is named or the named beneficiary predeceased the owner.
Assets Without Joint Ownership:
Property that is not owned jointly with a right of survivorship.
What Is Not Part of the Probate Estate?
Certain assets bypass probate because they are transferred directly to beneficiaries. These include:
Assets with Beneficiary Designations:
Life insurance policies, retirement accounts (e.g., IRAs, 401(k)s), and payable-on-death (POD) or transfer-on-death (TOD) accounts.
Jointly Owned Assets:
Property owned jointly with rights of survivorship, which automatically transfers to the surviving owner.
Trust Assets:
Any property or accounts held in a Living Trust are managed and distributed by the trustee, avoiding probate entirely.