What is a Probate Estate?

Last week’s post confirmed that, yes, you have an estate. Now I want to explain to you what happens with your estate after you die.

Specifically, this post will explore what happens to the assets in your estate that are only in your name and do not have a named beneficiary.

These assets comprise your “probate estate.” In general, life insurance death benefits, retirement assets, and pay-on-death accounts are not probate assets because they automatically pass to someone else after your death through your designation of a beneficiary. Further, assets held jointly with a right of survivorship with someone else are not probate assets.

Let me break it down for you with an example:

John owns the following assets in his estate (see last weeks post for an explanation of an estate):

1. Primary Residence with wife, Jane, as joint tenants with right of survivorship (in many States, the primary residence would be titled as Tenants by the Entirety, but I will get into types of ownership in a future post)

2. Joint bank account with daughter, Joni

3. Savings account in only John’s name

4. Retirement plan assets with Jane as beneficiary

5. Life insurance with Joni as beneficiary

6. Investment account in John’s name with Jane as pay-on-death beneficiary

In my example, only #3 is considered a probate asset because all other assets pass automatically to a specific recipient.

Stay tuned to my next post which will explain what may be your next question: What is probate?