Which Assets Require Probate and How to Reduce Costs

When someone passes away, their assets may go through a process called probate. This legal procedure can be time-consuming and costly. Understanding which assets require probate and how to reduce these costs can help ease the burden for your loved ones.

Assets That Require Probate

Some assets are subject to probate while others can bypass this process. Here are the main types of assets that typically require probate:

• Real Estate: Any property solely owned by the deceased.
• Bank Accounts: Accounts that do not have a designated beneficiary or are not jointly held.
• Investments: Stocks, bonds, and other investments without a named beneficiary.
• Personal Property: Items such as jewelry, vehicles, and collectibles not specified in a will.

Assets That Bypass Probate

Some assets can skip the probate process, saving time and money. These include:

• Jointly Held Assets: Assets held with rights of survivorship automatically pass to the surviving owner.
• Beneficiary Designations: Accounts such as life insurance, retirement funds, and payable-on-death accounts with a named beneficiary.
• Trusts: Property placed in a trust generally avoids probate.

Tips to Reduce Probate Costs

Reducing probate costs can be achieved through careful planning. Here are some strategies:

• Create a Trust: Establishing a trust can help assets bypass probate entirely.
• Designate Beneficiaries: Ensure all applicable accounts have designated beneficiaries.
• Joint Ownership: Holding property jointly with rights of survivorship can transfer ownership outside of probate.
• Gift Assets: Consider gifting assets during your lifetime, but be aware of potential tax implications.

By understanding which assets require probate and implementing strategies to reduce costs, you can simplify the process for your loved ones.

For more information, visit National Probate Services News.