What are Non Probate Assets?

Non probate assets are assets that can avoid going through the probate court process. Certain assets fall into this class and they will go through much simpler transfer process. The process of transferring these types of assets is going to be much simpler than assets that have to go through probate. Some assets are automatically considered to be non probate assets. These assets are going to be transferred directly to the new owner whenever the individual that owned them passes away. You can also put any other assets into a trust and they will become non probate assets. Here are the basics of non probate assets.

Retirement Accounts

Retirement accounts such as the 401(k)s, IRAs, and Roth IRAs are considered to be non probate assets. These types of accounts allow you to designate a specific beneficiary whenever you start them. Therefore, if you pass away, the assets in these accounts are going to be transferred directly to the beneficiary that you designated.

Life Insurance

If you have a life insurance policy, the money that will be paid to your beneficiaries is also considered to be a non probate asset. As soon as you die, the individual will have to alert the life insurance company and then they will cut them a check.

Will nonprobate assets be included in your gross estate?

Nonprobate assets are assets that you own that will not have to go through the probate process when you die and they are passed onto your beneficiaries. Nonprobate assets simplify the process of transferring ownership to your beneficiaries; however, the asssets are not removed from your gross estate. Any assets that you own will be included in the gross estate. Having nonprobate assets does not necessarily provide any tax benefits to you. Nonprobate assets could include money in payable-on-death accounts as well as real estate that is owned jointly with another individual. This could also include life insurance death benefits. 

blog comments powered by Disqus