In the aftermath of losing a loved one, it can be challenging to focus on legal matters. However, if they left a will, your loved one’s estate is likely to go through probate court. Understanding what assets are subject to probate can help you prepare for the process.
What is the purpose of probate?
Probate court is a legal process where a deceased person’s debts get paid and their assets get transferred to their rightful beneficiaries. If your loved one’s assets reside in a trust, chances are they won’t have to go through probate. But if they left a will, there are several assets that must go through probate.
1. Undesignated assets
If an asset has no beneficiary attached to it, it becomes part of the estate and must pass through probate. In some cases, a testator might simply list “my estate” as their beneficiary. When this happens, a court will have to decide who “my estate” is and how the assets will be distributed.
Another reason an asset might have to go through probate is if the attached beneficiary passes away before they can receive their inheritance. The asset then becomes part of the estate along with other items that don’t have a designated beneficiary.
2. Tenants-in-common assets
In a tenants-in-common agreement, two or more people share a percentage of an asset. This can include items such as property, bank accounts, stocks, vehicles or bonds. When one owner passes, their share becomes part of their estate and must therefore pass through probate.
Tenants-in-common assets are unlike joint tenant agreements, where rights of survivorship automatically pass the asset onto the surviving owner. In this case, assets do not have to go through probate.
3. Individually owned assets
Any asset that is the personal property of your loved one will have to go through probate. Items of high value solely under the deceased person’s name will inevitably go through probate, such as:
- Bank accounts
Even lesser-value items such as sentimental belongings, electronics or furniture may pass through probate.
During this difficult time, you may be caught between grieving for your loved one and trying to organize estate matters. Knowing which assets will need to go through probate can help ease your stress and ensure proper distribution of your loved one’s estate.