Not everything a person owns at death has to go through Surrogate's Court. Many families are surprised to learn that a significant portion of their loved one's estate may already have a built-in path to the right people, no judge required. Understanding which assets skip probate entirely, and why, can save an executor months of unnecessary paperwork and give grieving families one less thing to worry about.
Life insurance policies, retirement accounts such as IRAs and 401(k)s, and annuities all pass directly to whoever is named as beneficiary on the account paperwork, regardless of what the decedent's will says. This is because these designations are contractual, governed by provisions such as those found in New York's beneficiary designation statute, and they operate independently of the probate process. I have seen families discover, sometimes painfully, that an outdated beneficiary form from decades earlier controls the outcome even when a will clearly states otherwise. That is why I advise every client to review these designations regularly, particularly after a divorce, remarriage, or the birth of a grandchild.
Real estate, bank accounts, or brokerage accounts titled jointly with rights of survivorship pass automatically to the surviving co-owner the moment the other owner dies. No petition, no waiting period, no court involvement. The surviving owner typically only needs a certified death certificate to update the deed or account records. I recommend this option to married couples and, with caution, to parents who want a simple mechanism for a spouse or child to have immediate access to funds.
Bank accounts can carry a payable-on-death designation, and brokerage accounts can carry a transfer-on-death designation, both of which name a beneficiary who receives the asset outside of probate. Unlike joint ownership, the named beneficiary has no rights to the account while the original owner is alive, which makes this a popular option for clients who want control during their lifetime paired with a clean, automatic transfer at death.
As we discussed in a prior article on revocable living trusts, property properly transferred into a trust during the grantor's lifetime is no longer owned individually. It belongs to the trust, and the successor trustee distributes it according to the trust terms, entirely bypassing Surrogate's Court.
Probate exists for a reason, and it is not something to fear. But knowing which pieces of an estate never enter that process at all helps families understand what to expect, and helps me guide my clients toward a plan that minimizes court involvement where it makes sense to do so.
If your loved one left behind assets which need to be identified as probate or non-probate property, contact us today at (347) 766-2685 for a free phone consultation.
Contributed by Roman Aminov, Esq, a queens estate attorney in New York City.
