Dallas Probate Attorney: What are “Nonprobate Assets”?

Posted on | November 8, 2011 | No Comments

Nonprobate assets are interests that pass at death other than by will or by intestacy. Nonprobate assets typically fall into one of four categories: 1) property passing by contract; 2) property passing by right of survivorship; 3) property held in trust; and 4) pay on death arrangements.

                Property passing by contract generally include life insurance proceeds and death benefits under an employee retirement plan. In these contracts, the insured /employee will designate with the carrier a beneficiary who will automatically take upon the insured/employees passing.

Property held in the name of the decedent and another person as joint tenants with right of survivorship is another form of nonprobate assets that are not transferred through a will. Automobiles, motor homes, boats and real property can all be registered with a right of survivorship form between two or more persons.

A will can only dispose of property that a decedent owns at the time of death. Therefore, if the decedent established an inter vivos trust and transferred property into that trust, he or she is no longer the owner of that property, the property becomes that of the trust. Therefore, legal title will remain in the trustee after the decedent dies and the trust will continue.

Pay on death or transfer on death provisions can be used in a number of different scenarios to help avoid probate. Pay on death arrangements can be used for bonds, mortgages, promissory notes, securities accounts, contracts and bank accounts.

Converting as many assets as possible to nonprobate assets is an effective tool in estate planning. Having nonprobate assets saves time, money and headache by simplifying the passage of title through probate court proceedings.

For information on Texas Probate contact The Wright Firm at 972-353-4600 or visit our website at www.thewrightlawyers.com. 

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