Will My Assets Pass Through Probate?
Most people are familiar with the idea of a Will. They know it is a document which allows a person to hand down their assets after passing away. They also generally know that someone must be appointed to distribute those assets in accordance with their wishes, known as the Executor or Executrix. What many are not familiar with, however, is probate, and it may come as a surprise to some to learn that not all assets are going to pass through it.
Probate is the process through which a Last Will and Testament is validated and the assets covered under it are managed and distributed for the testator, which is the legal name for the person who has died. There are certain assets which will generally always pass through probate, so long as they are not held in trust, the largest for most being real estate. If someone is the legal owner of a piece of property, meaning they are on the Deed, they can leave it to whomever they want, but that transfer will go through probate because neither New Jersey nor Pennsylvania allow for transfer on death Deeds for real estate.
Other assets, however, such as life insurance policies, 401Ks, and IRAs, allow for the owner of the account to designate a beneficiary for those funds directly through the institution that holds it. So long as that beneficiary is properly put into place, these accounts would transfer or be payable on death. Colloquially, these are often referred to as “TOD” or “POD” accounts. These accounts are released to beneficiaries upon presentation of the necessary documentation, which is usually a death certificate, identification of the beneficiary, and whatever additional paperwork is required by institution holding the account. This effectively removes them from the pool of assets considered in the probate process.
If you have questions regarding estate planning, or have any other legal inquiry, contact us at [email protected].