People tend to think that all their assets must eventually go through probate, but that is not true. For example, if you and your spouse share joint ownership of your home, your spouse will own it under right of survivorship after you pass away.
You no doubt own other assets that will not have to go through probate as long as you adhere to certain guidelines.
A retirement plan, such as your 401(k), will only be subject to probate if you have not named a beneficiary. Some investment accounts also permit the naming of beneficiaries, such as those with “transfer on death” designations. Most people name a spouse as the beneficiary, but it is also a good idea to name an alternate in the event your spouse should predecease you.
In addition to retirement accounts or accounts that have the TOD designation, trusts and the assets they contain, including real estate, are not subject to probate. Insurance policy proceeds will not have to go through probate either.
Assets bound for probate
Any cash accounts that do not have the TOD designation will be subject to probate, as will any personal items, including valuables like jewelry or your art collection. Any real estate that is not part of a trust will go through probate. If you own a portion of a property with a friend or business associate, for example, as tenants in common, your portion of the asset will be subject to probate. It will eventually go to your heirs, not to the other property owner.
Probate administration can be complex, but an estate planning attorney can help you understand it and ensure there are no legal entanglements, such as an omission in the naming of a beneficiary on your 401(k). You will enjoy peace of mind knowing that the probate process will go smoothly and that the distribution of assets to your heirs will be according to your wishes.