Probate is the court process by which estates valued at more than $50,000 are settled, whether you have a will or not. With a will in place, you can name your executor – the person who collects and inventories all your property, pays your debts and divides what is left among your heirs. Without a will, the court appoints an executor for you. However, the state of Minnesota excludes certain property from the probate process.
Non-probate property passes automatically to a named individual with whom there usually exists a contractual arrangement. Property that is considered non-probate includes:
- Joint tenancy property. When two or more persons share equal ownership of the same property, they are said to have joint tenancy. This creates a right of survivorship so the property transfers directly to the survivor if one of the owners dies.
- Life estate. A landowner transfers property to another but reserves the right to own the property until his or her death.
- Transfer-on-death (TOD) deeds. A landowner can sign a deed transferring the property automatically upon his or her death. Unlike a life estate, the landowner can void the deed at any time without the recipient’s consent.
- Jointly held bank accounts. Two or more people are listed as account holders for jointly held bank accounts. If one of the parties dies, the other owns the account.
- Payable-on-death accounts (PODs). A POD is an individual financial account that designates who is to receive the funds after your death, but not before.
- Transfer-on-death (TOD) security registration, life insurance and annuity contracts. The named beneficiary of these items receives the benefits after you die without undergoing the probate process.
- Individual retirement accounts (IRA), retirement plans, and certain employment and union death benefits. Named beneficiaries of these policies receive the benefits without probate review.
- Trusts. Assets owned in a trust with a designated beneficiary are protected from probate.
If designated beneficiaries and joint owners predecease, the disposition of non-probate assets gets very complicated. The compassionate, experienced attorneys at Hess & Jendro Law Office, P.A. can assist you in developing a probate plan that protects your assets and makes sure your wishes are fulfilled.