This part in the series will focus less on what is in a decedent’s probate estate and more on what isn’t.
As a general rule, anything devised through a will, or given through intestate distribution is considered the probate estate, but there are certain transfers that avoid this distinction. These transfers include:
- Trusts – trusts made during the decedent’s lifetime can be used as instruments of probate avoidance and any asset or property placed in the name of that trust can be transferred according to the wishes of the decedent. For more information regarding trusts please refer to the Trusts Series of this blog.
- Marital Property – generally, property owned jointly with a spouse will automatically transfer directly to the surviving spouse without the need to pass through probate.
- Payable on Death Accounts (PODs) – accounts containing POD provisions will be automatically transferred to the beneficiary named in that provision once proof of death of the original owner of the account is furnished to the financial institution.
- Life Insurance Proceeds – much like PODs, life insurance proceeds will automatically be paid to the named beneficiary as soon as proof of death of the insured is furnished.
These represent just a few examples of the types of transfers and will-substitutes that automatically avoid probate. The utilization of these instruments, as well as other estate planning tools can be a powerful way of avoiding the probate process.
Tags: asset protection, Estate Planning, probate