Probate assets are any assets that require a probate proceeding in order to pass to
the intended heir or devisee (if the decedent had a will) or the individual entitled to
receive the property under the laws of intestacy (if the decedent had no will).
Probate assets include real property that is titled solely in the decedent’s name; but
also includes real property in which the decedent owned a tenants in common
interest at death. Tenancy in common means that each of the owners have an
undivided proportionate interest in the entire property. For example, it is common
for farmland to pass out of an estate to adult children as tenants in common. If a
child died owning that tenants in common interest, a probate proceeding would be
required for that child’s own estate.
Examples of other probate assets include – (1) personal property, such as jewelry,
furniture, and personal effects; (2) bank accounts or brokerage accounts solely in
the decedent’s name; (3) interests in partnerships, corporations, or limited liability
companies owned by the decedent; (4) life insurance policies that name the estate
as the beneficiary; (5) recreational vehicles and automobiles solely in the
decedent’s name.
Non-probate assets are those assets that already describe how the property will
pass at death. These assets bypass probate and go directly to the designated
persons.
Examples of non-probate assets include – (1) real property owned in joint tenancy
with rights of survivorship; (2) bank or brokerage accounts held jointly or with
payable on death (POD) or transfer on death (TOD) beneficiaries; (3) automobiles
and other vehicles held jointly; (4) any property held in the name of a trust; (5) life
insurance with designated beneficiaries (other than the estate); and (6) retirement
accounts with designated beneficiaries (other than the estate).