What you need to know about non-probate assets

Learn more about non-probate assets. See how you should factor them into your estate plan and what happens with them after your death.

When creating an estate plan, a person must consider all of his or her assets. This requires understanding the different types of assets he or she may own. Knowing the proper way to manage an estate and set up the instructions for the management after death will enable a person to better ensure the executor of the estate has an easy time carrying out the estate plan when the time comes. One point to consider when creating an estate plan in Massachusetts is non-probate assets.

What is probate?

To begin, it helps to understand what probate is. Mass.gov explains this is the process of transferring the ownership of a person's assets after his or her death. It is overseen by the court and typically involves ensuring the will is valid, changing titles on assets, paying debts and handling other legal aspects of the estate.

Probate may be a fast process. However, in some cases, it can take a while. This often depends on the complexity of the estate.

What is a non-probate asset?

One way to make an estate easier to manage is to include non-probate assets. These are assets that transfer to another owner when the original owner dies. This might include jointly owned property. When one owner dies, the property may automatically transfer to the other owner. Other examples include accounts with beneficiaries and some trusts. Non-probate assets may also include accounts payable or transferable on death

Do note that an asset that is only in the name of the person who dies and that does not have anyone with automatic rights to it under the law is not a non-probate asset. Additionally, any asset with ownership passed to another person in a will is not a non-probate asset.

What is a transfer on death?

As mentioned, some assets may be transferrable or payable on death. According to the 191st General Court, these are assets with a transfer of ownership passed instantly upon a person's death to another person. They require no intervention by the court, which makes them non-probate assets.

If you are creating your estate plan, then you want to ensure you pay attention to every detail. Any mistakes made in the process could lead to serious issues after your death when you are no longer here to handle them. That is why it is important to choose an experienced estate planning attorney, such as those at Cushing & Dolan, P.C., to oversee the creation of your estate documents.