Many people believe that the assets in their estate will be divided exactly the way their Will instructs. However, probate laws in your state or where your Will is being probated may treat some of your property differently. Estate property is categorized as either probate property or non-probate property. In this article, we will explore the difference between probate property and non-probate property, and how to avoid your property going through the probate process.
Generally, when an estate goes through probate, the Will must be filed with the probate court, a personal representative is appointed, bills and debts of the estate are paid, assets are administered, and then a final account of the estate is filed with the probate court. Through this process, the court determines how the assets of the estate should be administered.
Only property categorized as probate property will go through the probate process. Examples of probate property include real estate in the decedent’s name only or held as tenants in common, interest in a company, bank accounts in the decedent’s name only, and personal property. If estate property is in the name of the decedent only, not held in trust, and does not independently designate a beneficiary, it will probably have to go through the probate process.
Typically, the type of property that is categorized as non-probate and does not need to go through the probate process is jointly held property or property that has its own designated beneficiary. Some examples of non-probate property include real estate held as joint tenants with right of survivorship, jointly held bank accounts or accounts with a designated beneficiary, retirement accounts, life insurance policies, and property held in trust.
How to Avoid Probate
One of the most effective ways to avoid probate is to plan your estate in a way that minimizes the extent of your property that will be subject to the probate process. Some ways to do this include holding real estate property in a joint tenancy—so the other person has an automatic right of survivorship and the property does not pass through probate, create a living revocable trust, and naming beneficiaries on your bank accounts and retirement accounts whenever possible.
If you are interested in making a plan for how to best organize your estate, protect your assets, and provide for your loved ones, contact our experienced Myrtle Beach estate planning attorneys who can help you create a plan tailored to your needs and wishes.