Known for guiding New York families through complex non-probate asset matters, Roman Aminov brings proven experience, thoughtful counsel, and personalized planning to help clients protect their estates and beneficiaries throughout Queens and NYC
Are you concerned about what happens to your assets when you pass away? A common fear is the long and costly court process known as probate. This procedure can take months or even years for your loved ones to gain access to their inheritance.
I understand this issue personally, having experienced it myself. Fortunately, there is a solution: not all assets must go through probate. In New York State, specific assets can bypass the court if set up correctly. These are called non-probate assets, including retirement accounts and life insurance with named beneficiaries.
This article will guide you on how to convert probate assets into non-probate ones, saving time and money for your family. Read on to discover more!
Probate is the process where a Will is sent to the Surrogate’s Court and an Executor is chosen to act for the estate. It's also used for estate administration if someone dies without a will. Only certain assets go through probate; these are known as probate assets.
Probate assets pass by the will or through intestacy if there's no will because they lack a joint owner or beneficiary designation and aren't held in a trust. Common examples of probate assets include checking accounts and money market accounts without beneficiary designations, ownership interests in Corporations or LLCs that lack discussions on succession, stock certificates, cars, boats, furniture, jewelry, cash, and real estate without a joint owner.
One can turn a non-probate asset into a probate asset by not listing a beneficiary. However, it is preferable to convert probate assets into non-probate ones to avoid court hassle and costs.
Non-probate assets bypass the owner's will and go directly to the named beneficiary or joint owner. These also include "payable on death" or "transfer on death" provisions. Retirement accounts often have beneficiary designations, making them typical non-probate assets.
Examples of Non-Probate assets include:
- Retirement accounts like IRAs and 401ks with beneficiary designations
- Life insurance
- U.S. Savings bonds with co-owners
- Pension plan distributions with beneficiaries listed
- Trust funds
- Life estate assets
- Real property with joint owners having right of survivorship or tenants by entirety (normally default for spouses)
Listing beneficiaries on accounts or leaving assets in a living trust avoids probate. Estate planning aims to convert probate assets into non-probate assets, saving your family time and money by avoiding the probate process.
Conclusion
Non-probate assets save both time and money by skipping the court process. These assets go directly to the named person or joint owner. Retirement accounts and life insurance serve as good examples of non-probate assets.
Listing beneficiaries on all financial accounts is wise for keeping these advantages. Effective planning involves turning probate assets into non-probate ones. Think about your future, name your beneficiaries today, and make estate planning work for you!
FAQs
1. What are non-probate assets?
Non-probate assets are items that pass directly to beneficiaries without going through the court process known as probate.
2. Can you give examples of non-probate assets in NY State?
Yes, examples include life insurance policies with named beneficiaries, joint bank accounts, and retirement accounts like IRAs or 401(k)s.
3. How do I ensure my assets avoid probate in New York?
To avoid probate, name specific beneficiaries on your financial accounts and consider setting up a living trust for other properties.
4. Why is it important to know about non-probate assets?
Knowing about non-probate assets helps you plan better... It ensures your loved ones get their inheritance faster and with less hassle.
