June 18, 2014 by generationsprobate
When it comes to planning or distributing an estate, your probate attorney will probably say that knowing probate and non-probate assets is very important. This is because non-probate property calls for its own specific beneficiaries, and a will that designates beneficiaries to receive assets under this classification could even be invalidated.
Probate assets are those that generally do not have a surviving owner who could take succession in the case of the death of an owner. For example, a business classified as a sole proprietorship is considered probate because should the owner die, he will have no partner or co-owner to assume full ownership, thus the probate process is needed to determine the business’ new owner.
In general, personal property is considered probate assets, unless they are being held in trust. Even life insurance policies can fall under this category as long as the named beneficiary is the estate or the decedent.
In turn, partnership businesses and corporations are considered non-probate, because there is a clear successor. Assets with contractually named beneficiaries or those held in trust also fall under this definition. These are the properties that do not have to undergo court intervention to be passed on.
Joint or communal property of married spouses is among the most common non-probate assets. This is because marriage and family laws dictate that all community property will be owned by the surviving spouse.