If you’re thinking about writing a will, you may wonder, do all assets have to pass through probate? Many assets do not. You could structure your estate planning so that all your assets avoid probate, which may or may not be the best option in your situation. Knowing which property is part of the probate process is critical to handling the estate properly.
Dickson Frohlich Phillips Burgess can help you create the best estate plan for you and your family. We also help clients in all probate matters. A critical issue for probate is which assets can be transferred after someone passes away without going through the process.
Probate law covers what happens to a deceased person’s property after death. Probate is the legal process to settle the estate when there are probate assets. This applies whether or not there’s a will. Do all assets have to go through probate? No, but you must know which ones do if you’re responsible for the estate.
Parts of the probate process include:
- The estate’s assets are inventoried.
- The estate’s heirs and beneficiaries are identified and given notice.
- The estate’s creditors are also notified.
- Claims by creditors are paid or contested.
- Income received by the estate is managed.
- Taxes are paid.
- Remaining assets are distributed to heirs or beneficiaries.
Do All Assets Have to Go Through Probate?
Everything other than non-probate assets go through the process. The following pass after a person’s death under a written instrument or arrangement and avoid probate:
Community Property Agreements
Property that’s part of a community property agreement would pass at death according to its terms. They usually go to the decedent’s surviving spouse or domestic partner. All property owned by married couples and domestic partners is community property or separate property. This depends on when and how it was acquired. How it’s labeled impacts the legal rights and interests that each spouse or partner has to the property. Couples who are married and in domestic partnerships can have a community property agreement stating that all they own becomes community property after one of them passes away.
A trust is a method to hold and manage property to benefit one or more people or charities (beneficiaries). The property owner (the grantor) transfers title to the trust, which is overseen by a trustee. A trust can be revocable (the grantor can change it) or irrevocable (the trust can’t change). A living trust is a revocable trust the grantor creates for his or her benefit. After the person passes away, the property benefits others.
Joint Tenancy Property
Title of property can be held in joint tenancy, which means each person has equal rights to it. If one dies before the other, the survivor is the sole owner.
Joint Bank Accounts with Right of Survivorship
Each party has equal rights to the account. If one dies, the survivor owns the account.
Payable on Death (POD) Accounts
While a person is alive, they own the account. Another person can be listed as entitled to it when the owner dies.
Transferable on Death (TOD) Securities and Securities Accounts
These work the same way, except the account holds securities, not cash.
Individual Retirement Accounts (IRAs)
These retirement savings plans should list a beneficiary who will own it after the person passes away.
Life Insurance Contracts
The insured pays premiums so the policy beneficiary or beneficiaries can receive a benefit after the insured’s death.
Employee Benefit Plans
These retirement plans benefit former employees. When an employee passes away, benefits go to the person listed as a beneficiary.
Property Owned Out of State
Property outside Washington isn’t subject to the state’s probate process. It may or may not need to go through probate where it’s located.
Since the accounts, life insurance, and retirement benefits won’t pass through probate, it’s critical that they be handled properly before the owner passes away. Beneficiaries must be listed for cash or investments can be transferred as you wish. You should also update these names if the person dies before you do or you no longer want them to have these assets.
Under some circumstances, the following also can pass outside the probate process. They require forms and affidavits stating that the person receiving them is the next of kin or surviving spouse and that there is no personal representative for the deceased’s estate.
- Bank Accounts to $2,500
- Credit Union Accounts to $1,000
- Unpaid Wages to $2,500
- Social Security Benefits up to $1,000.
The Washington Department of Licensing can transfer vehicle and boat registration. You must fill out a form stating that the deceased left no estate that needs administration and that there is no personal representative for it.
What Assets Need to be Listed for Probate? Dickson Frohlich Phillips Burgess Give You the Answer in Your Case.
If you’ve been named in a will as an executor or a close family member died without a will, hiring an experienced attorney to guide you through formal probate administration is vital. It can be complex and intimidating without the right advice and help. If you make a mistake, like the wrong decision on what assets need to be listed for probate, it can be costly. With the assistance from a trusted Seattle probate law attorney, you can have confidence your loved one’s estate is being managed properly.
Dickson Frohlich Phillips Burgess has more than 100 years of experience helping people make and deal with final and personal arrangements. We are the legal consultants to turn to for help with any probate issue. A phone consultation is available when you call us at 206-621-1110.