The executor of an estate has to write up an inventory listing all of the assets she’s dealing with in settling that person’s affairs. But that list does not necessarily include all the assets the person owned before death. The executor is responsible for accounting for probate assets only, Alexander A. Bove, Jr., explains in The Complete Book of Wills, Estates & Trusts.
What assets are not probate assets?
- Jointly held assets
- Insurance proceeds payable to named beneficiaries (not to the estate itself)
- Retirementy plans and annuities payable to named beneficiaries (not the estate itself)
- Assets held in a trust
Remember, it is only probate property that is disposed of through a will. In the case of jointly held assets, ownership passes automatically to the survivor. Trusts and insurance policies typically designate who the inheritor will be, so no “settlement” process is needed. Even if the asset is disposed of by reference in the will, if it is held jointly, title will trump the provisions of the will.
Can life insurance ever be a probate asset? Yes, Bove explains, offering two examples:
- A life insurance policy was made payable to the estate
- The deceased was the owner of a life insurance on someone else’s life, and that person is still living
So, if only probate property is disposed of through a will, can you plan your estate in such a way as to leave only non-probate assets? And, if you did, of what use would a will be?
A will can have several uses, Bove points out, even if you’ve arranged to leave only non-probate assets:
- Naming a guardian for minor children and for their assets, including given specific instructions to the guardian
- Naming an executor for the estate
- Authorizing an executor to carry on your business
- Detailing your wishes for funeral arrangements
Whether assets are probate or non-probate determines whether they will be disposed of through the will. But whether or not there is a will is a matter of which wishes it’s important to you to make known.
“In short”, Bove says, summing up the topic, “There are many things you can do, some things you may do, and a few that you must do – and can only do – in your will.”
– By Ronnie of the Rebecca W. Geyer blog team