Understanding Probate and Non-Probate Assets

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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

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.

Non-Probate Assets

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.

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GenerationsProbate

Generations is a Sacramento-based estate and trust law firm, providing quality legal counsel in Estate and Tax Planning, Trust Administration, Probate Administration and Elder Law. The name reflects the firm's position as a devoted ally that helps families and businesses make informed decisions about their futures, from one generation to the next.


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