Non-probate assets are types of property that won’t have to go through the probate process after a person dies, and will instead pass directly to the intended heirs shortly after death. Avoiding probate saves time and money, but non-probate property can sometimes pass to unintended beneficiaries and creditors. Careful estate planning is essential to avoid probate and still protect assets from transferring into the wrong hands.

Which Assets Are Not Generally Subject to Probate?

Transfer or Payable On Death Assets

Assets that are designated as in trust for (ITF), payable on death (POD), or transfer on death (TOD) including health savings accounts and property deeds can avoid probate. If designated beneficiaries die before the property owner passes, probate cannot be avoided.

Rights of Survivorship

Assets that are owned jointly with a spouse, sibling or child through rights of survivorship will avoid the probate process.

Tenants by the Entirety

A special type of joint ownership referred to as tenants by the entirety will also avoid probate after death.

Assets in a Revocable Living Trust

Assets owned by a Revocable Living Trust at the time of a person’s death will avoid probate. When additional assets are acquired after the living trust is created, they must be added to the trust to avoid probate. Although one remedy to this dilemma is to create a “pour-over” will that will direct acquired assets into the trust at death, this property will still contribute to the probate estate and is subject to the probate process.

Assets in a Life Estate

Assets retained under a life estate will not be subject to probate. In some states, assets such as real estate under an enhanced life estate deed that pass to a beneficiary other than the deceased will also avoid probate.

Assets Owned Through Contract Rights

Assets that are payable to a designated beneficiary through contract rights will avoid probate. Such assets include IRAs, 401(k)s, annuities, and life insurance policies. If designated beneficiaries die before the owner of these assets, probate will be necessary.