When a person dies, they are no longer capable of owning their assets. Accordingly, assets that were previously in their name pass to those who are still living. If the deceased had a Last Will and Testament, their assets will pass according to that document. If not, their assets will pass according to state statute.1This fact is understood by most people; however, what is less understood is what happens to the assets and who owns them in the time between a person’s death and the transfer to another. This process is referred to a “probate” and involves “probate assets.”
Probate Assets and Process
Probate assets are assets that are held solely by the deceased. These assets will have no owner as soon as the the owner dies and they will pass through the probate process. The probate process depends on the size of the estate, but the first thing that happens is:
The probate court appoints an executor or personal representative of the estate. This individual is given the ability to act on behalf of the estate to handle all of the final affairs including the distribution of final assets.
The executor or personal representative then transfers all assets from the deceased to the estate. The representative is responsible for accounting for all assets until they are distributed to the deceased survivors.
All creditors are informed or put on notice and given an opportunity to file a claim. Debts and taxes are taken from the probate assets prior to distribution.
The representative files a final account of the estate with the court, and then distributes the assets to the survivors.
This process, regardless of the size, is time-consuming, typically taking at least a year, and can be costly for your survivors with fees for the court as well as the personal representative. The probate process happens regardless of whether a person has a will or not. As such, avoiding probate is often an important goal in estate planning.
Non-probate assets are assets that pass immediately upon the death to another party. The only thing required for non-probate assets to transfer from the deceased is to provide proof of the person’s passing. This typically involves providing a death certificate to the appropriate agencies. Some examples of non-probate assets include:
Joint Bank Accounts, or Accounts with a Pay-on-Death designation
Transfer on Death designation for titled assets such as vehicles, boats, and trailers.
Beneficiary deeds for personal property that does not have a title
Beneficiary designations on intangible personal property such as retirement accounts, and insurance policies.
Property held in rust. 2
Non-probate transfers will avoid the timely and public process of the probate court and allow assets to transfer quickly and privately.
Contact a St. Louis and St. Charles Probate Attorney Today
Understanding the probate system is the first step to efficiently navigating it. Whether you are planning for the future or are the representative of an estate, a skilled probate attorney at The Law Offices of Kenneth P. Carp can assist you.Contact 636-947-3600 today for a for more information today.