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What Is the Difference Between Probate and Non-Probate Assets?

Posted on in Estate Planning

Evergreen Park Estate Planning LawyerThe estate planning process involves decisions about how a person’s assets will be distributed to their heirs following their death. During this process, it is important to understand how different types of assets will be handled. Some assets may be passed to heirs through the probate process, in which the executor of the person’s estate will file their will in probate court, take an inventory of their assets, notify beneficiaries and creditors, and distribute the assets according to the instructions provided in the will. This process can be complicated, but a person may be able to make things easier for their loved ones by determining whether certain assets may be passed to their heirs without the need to go through probate.

Options for Distributing Assets Outside the Probate Process

Probate assets will typically include a person’s physical belongings or financial assets left to beneficiaries in their will. In many cases, court oversight will be required when these assets are distributed to heirs during the probate process. However, certain types of assets will not need to go through probate, and they can be directly distributed to beneficiaries following a person’s death. These include:

  • Jointly-owned property - A person may co-own certain assets along with their spouse or other family members. For assets that are jointly owned with the right of survivorship, the co-owner will assume full ownership of the assets following a person’s death. These arrangements are often used for real estate property such as a couple’s family home. Other jointly-owned assets, such as shared bank accounts, may also be handled in this manner.

  • Accounts with named beneficiaries - Retirement accounts such as 401Ks or IRAs will usually have designated beneficiaries. Following the death of the account holder, the remaining funds in the account may be directly distributed to the beneficiaries. Other types of accounts may be designated as payable-on-death or transfer-on-death, allowing a beneficiary to assume ownership after the death of the account holder.

  • Life insurance policies - Beneficiaries of these policies will typically be able to receive payouts following the death of the policyholder, and these payouts will be handled outside of the probate process.

  • Trusts - A person may place assets in different types of trusts, allowing a trustee to manage these assets and distribute them to beneficiaries. Since assets will be owned by the trust rather than the original owner, they will not be included in the probate estate, and they can be distributed directly to beneficiaries according to the instructions provided by the trustmaker.

Contact Our Cook County Probate Attorney

To avoid the complications of the probate process, you may want to take steps to ensure that your assets can be directly passed to your heirs. By creating a comprehensive estate plan, you can determine the best ways to safeguard your assets and ensure that they will be distributed to your loved ones according to your wishes. At The Marques Eason Law Group, we can address your estate planning needs, and we can also provide representation during the probate process to ensure that a person’s assets will be distributed correctly. Contact our Chicago estate planning lawyer today at 312-973-3755 to learn more about our legal services.

 

Sources:

https://ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2104&ChapterID=60

https://www.thebalance.com/what-are-probate-assets-an-overview-3505271

Illinois State Bar Association Gate City Bar Association Cook County Bar Association Will County Bar Association
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