When planning your estate it is important to understand the difference between probate and non-probate assets. Probate is the process through which a court oversees the distribution of your property after you die. Some assets are distributed to heirs by the Personal Representative (probate assets) and some assets bypass the court process and go directly to your beneficiaries (non-probate assets).
The probate process includes filing a will and appointing a personal representative, collecting assets, paying bills, filing taxes, distributing property to heirs, and filing a final accounting. This can be a costly and time-consuming process, which is why some people try to avoid probate by having only non-probate assets.
Probate assets are any assets that are owned solely by the decedent. This can include the following:
- Real property that is titled solely in the decedent’s name or held as a tenant in common
- Personal property, such as jewelry, furniture, and automobiles
- Bank accounts that are solely in the decedent’s name
- An interest in a partnership, corporation, or limited liability company
- Any life insurance policy or brokerage account that lists either the decedent or the estate as the beneficiary
Non-probate assets can include the following:
- Property that is held in joint tenancy
- Bank or brokerage accounts held in joint tenancy or with payable on death (POD) or transfer on death (TOD) beneficiaries
- Property held in a trust
- Life insurance or brokerage accounts that list someone other than the decedent as the beneficiary
- Retirement accounts
When planning your estate, you need to take into account whether property is probate property or non-probate property. Your will does not control the distribution of non-probate property. Check the ownership of your property and your accounts to make sure jointly owned property will be distributed the way you want it to. It is also important to review your beneficiary designations.
Schedule a consultation with South Carolina estate planning and elder law attorney Kevin Hardy to plan for your property to be distributed the way you intend upon your passing.