Probate v. Non-Probate: What Is the Difference?
When planning your estate it is important to understand the difference between probate and non-probate assets. Probate is the process through which the Register of Wills determines how to distribute your property after you die. Some assets are distributed to heirs by the Register of Wills (probate assets) and some assets bypass the process and go directly to your beneficiaries (non-probate assets).
The probate process includes filing a will and appointing an executor or administrator, 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 non-probate assets.
Probate assets are any assets that are owned solely by the decedent. This can include the following:
- Real property 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
Non-probate 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 non-probate property. Your will does not control the distribution of non-probate 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.
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David Wingate is an estate planning and elder law attorney at Estate and Elder Planning by David Wingate. The Estate and Elder Planning office services clients with powers of attorneys, living wills, Wills, Trusts, Medicaid and asset protection. The Elder Law office has locations in Frederick, Washington and Montgomery Counties, Maryland.
Notice: this Blog is published as a free service of the Estate and Elder Planning by David Wingate. The information is for general informational purposes only and does not constitute legal advice. For specific questions, please consult with one of our experienced attorneys. We encourage you to share this newsletter with anyone you think may be interested.Tags: probate