Define: Nonprobate Property

Nonprobate property refers to assets that do not pass through the probate process upon the owner’s death. These assets are transferred directly to the designated beneficiaries or joint owners.

Examples of nonprobate property include life insurance policies with named beneficiaries, retirement accounts with designated beneficiaries, jointly owned property with rights of survivorship, and assets held in a living trust.

Nonprobate property bypasses the probate process, meaning it does not need court supervision for transfer. In contrast, probate property requires court involvement to distribute assets according to the deceased person’s will or state laws of intestacy.

No, nonprobate property cannot be included in a will because it passes directly to the designated beneficiaries or joint owners outside of the probate process.

In general, nonprobate property is not subject to contestation unless there are allegations of fraud, undue influence, or lack of capacity in the creation or designation of the nonprobate asset.

Nonprobate property is typically not used to pay the deceased person’s debts unless it was specifically designated for that purpose. Debts are usually paid from the probate estate, which includes assets subject to probate.

If there is no designated beneficiary for nonprobate property, it may be subject to probate and distributed according to the deceased person’s will or state laws of intestacy.

Nonprobate property can be changed or revoked by the owner as long as they have the legal capacity to do so. This may involve updating beneficiary designations or changing joint ownership arrangements.

Nonprobate property may have tax implications, such as income tax on retirement account distributions or estate tax on certain assets. It is advisable to consult with a tax professional to understand the specific tax consequences.

Consulting an attorney is recommended when dealing with nonprobate property, especially if you have complex assets or concerns about the distribution process. An attorney can provide guidance and ensure your wishes are properly documented and executed.