Define: Nonprobate Assets

Nonprobate assets are assets that do not go through the probate process after the owner’s death. These assets typically pass directly to a designated beneficiary or joint owner.

Examples of nonprobate assets include life insurance policies with a designated beneficiary, retirement accounts with a designated beneficiary, payable-on-death bank accounts, and property held in joint tenancy with right of survivorship.

No, nonprobate assets do not need to be included in a will because they pass directly to the designated beneficiary or joint owner outside of the probate process.

In general, nonprobate assets are not subject to contestation by heirs or beneficiaries because they pass directly to the designated beneficiary or joint owner according to the terms of the account or policy.

Nonprobate assets are typically not used to pay the deceased person’s debts, as they pass directly to the designated beneficiary or joint owner and are not considered part of the probate estate.

Yes, nonprobate assets can be included in an estate plan to ensure that they pass to the intended beneficiaries and to coordinate with the overall distribution of the estate.

Nonprobate assets with designated beneficiaries can typically be changed or revoked by the account or policy owner at any time, as long as they are mentally competent to do so.

Nonprobate assets may be subject to estate taxes, depending on the value of the assets and the applicable tax laws. It is important to consult with a tax professional or estate planning attorney for guidance.

If a designated beneficiary predeceases the account or policy owner, the nonprobate asset may pass to a contingent beneficiary, if one is named, or to the deceased beneficiary’s estate.

To ensure that your nonprobate assets are properly coordinated with your overall estate plan, it is important to review and update beneficiary designations regularly, and to consult with an experienced estate planning attorney for personalized guidance.