Types of Assets That Go Through Probate in New York
Probate is the legal process through which a deceased person’s assets are identified, managed, and distributed to their heirs or beneficiaries. Not all assets go through probate; understanding which ones do can help you plan your estate more effectively. In this article, we’ll explore the types of assets that typically go through probate in New York.
Probate: An Overview
Before delving into the specific types of assets subject to probate, let’s briefly review the probate process. Probate serves several purposes, including:
- Validating the deceased person’s will, if one exists
- Identifying and inventorying the decedent’s assets and liabilities
- Paying any outstanding debts, taxes, and expenses
- Distributing the remaining assets to heirs or beneficiaries
Assets That Typically Go Through Probate
1. Assets Held Solely in the Deceased Person’s Name: Assets that are solely in the decedent’s name are usually subject to probate. This includes real estate, bank accounts, investment accounts, and personal property without designated beneficiaries or joint owners. For example, if the deceased person owned a house in their name alone, it will likely go through probate.
2. Personal Effects and Household Items: While not all personal property goes through probate, items of significant value may be subject to the process. For example, the probate estate could include valuable art collections or antique furniture.
3. Bank Accounts Without Beneficiary Designations: Bank accounts, including savings, checking, or certificate of deposit (CD) accounts, that do not have payable-on-death (POD) or transfer-on-death (TOD) beneficiaries may go through probate.
4. Investment Accounts Without Beneficiary Designations: Investment accounts, such as brokerage accounts and individual retirement accounts (IRAs), without designated beneficiaries, could be subject to probate.
5. Real Estate Without Joint Ownership: If the deceased person owned real estate solely in their name without joint ownership or a beneficiary designation, it typically goes through probate. However, properties held as joint tenants with rights of survivorship or as tenants by the entirety generally avoid probate.
6. Business Interests: If the decedent owned a business, their ownership interests may go through probate unless there is a buy-sell agreement or other arrangement in place.
Assets That Typically Avoid Probate
While the above assets commonly go through probate, many assets can be structured to avoid probate entirely. These include:
1. Assets with Beneficiary Designations: Assets with designated beneficiaries, such as life insurance policies, retirement accounts (e.g., 401(k)s and IRAs) with named beneficiaries, and payable-on-death (POD) or transfer-on-death (TOD) bank accounts, typically pass directly to the beneficiaries outside of probate.
2. Trust Assets: Assets placed in a living trust or other types of trusts usually avoid probate. The trustee manages and distributes these assets according to the trust’s terms, bypassing the probate process.
3. Jointly Owned Assets: Property held jointly with rights of survivorship or as tenants by the entirety automatically transfers to the surviving owner(s) upon the decedent’s death.
4. Assets with a Payable-on-Death Beneficiary: Certain financial accounts can be set up with a payable-on-death beneficiary, allowing the funds to pass directly to the named beneficiary without probate.
5. Small Estates: In New York, estates with a total value of $50,000 or less may qualify for a simplified probate process or may be exempt from probate altogether.
Estate Planning to Minimize Probate
If you want to minimize the assets that go through probate, careful estate planning is essential. Working with an experienced estate planning attorney, such as Morgan Legal Group in New York, can help you create a comprehensive plan to avoid or reduce probate. Strategies may include:
- Creating a revocable living trust to transfer assets outside of probate
- Updating beneficiary designations on financial accounts and insurance policies
- Establishing joint ownership arrangements
- Utilizing small estate procedures when applicable
- Consulting with legal professionals to ensure your estate plan aligns with your goals
Consult with Morgan Legal Group
Proper estate planning can help you protect your assets and streamline the distribution of your estate. To ensure your wishes are carried out and to minimize the assets subject to probate, consult with the experienced attorneys at Morgan Legal Group in New York City. We specialize in estate planning and probate matters and can help you create a tailored plan that suits your needs.
Contact us today to schedule a consultation and start your estate planning journey.
