Understanding nonprobate assets
Assets that do not need to go through the probate process after you die are a unique type of property. They are beneficial because it means that money is not lost through probate. It also means that your heirs are more likely to be able to gain access to their inheritance in a short period of time.
The only potential problem with nonprobate property is that there is a higher risk of it ending up in the wrong hands after your death. This is because any jointly owned nonprobate property will not go through the probate process to ensure that everything is divided as it should.
The different types of nonprobate assets
There are six main types of nonprobate assets. These include assets that are jointly owned with another friend, business partner or family member. Other assets include those that are payable on death (POD), those that are living trusts, or assets that are recognized as jointly owned with your spouse, often called tenants by the entirety.
Nonprobate assets also include things such as life insurance policies, annuities and 401(k) plans.
How to plan for the future with nonprobate assets
It is important to be able to identify which of your assets will need to go through probate and which are nonprobate assets when writing your will, so that you can understand the outcome of your estate and have control over this. It is important that you, therefore, conduct thorough research so that your heirs will be allocated assets as you intend them to be distributed.
Source: FindLaw, “What are non-probate assets?,” accessed Jan. 19, 2018 posted on Estate Planning