As part of creating an estate plan, one goal individuals or couples may have is to make sure their loved ones don’t have to go through probate after their death to deal with their assets. However, not every single asset a person owns will need to go through probate, and more importantly, probate can be avoided altogether with the right estate plan.
Which Assets Need to Go Through Probate?
Before someone dies, it’s best for them to plan ahead so probate can either be avoided or at least minimized. Without a proper plan in place, assets that would typically go through probate include:
● Property solely owned by the person who died — this can include real estate, cars, or other registered items that are solely owned. Any jointly owned items will not go through probate as they will transfer to the surviving owner. However, if both owners of a joint asset pass away, then the asset would have to go through probate.
● Significant personal possessions — a judge isn’t going to know that a piece of jewelry is a family heirloom that is supposed to be passed down to a certain person. That’s why it’s critical for individuals to establish where important items like jewelry, clothing, or collections should be bequeathed before a person passes.
Which Assets Do Not Need to Go Through Probate?
There are many assets that do not need to go through probate because they are either jointly owned or have a beneficiary designated. Those assets include:
● Retirement accounts (this is because a beneficiary should have already been named);
● Assets properly titled in a Living Trust;
● Money in a payable-on-death bank account;
● Distributions from a pension plan;
● Household items or goods of minimal value.
This is not an exhaustive list, so that’s why it’s crucial to speak with an experienced estate planning attorney to make sure you have arrangements for important assets upon your passing.
It is also important to remember that avoiding probate should not be your only aim when estate planning. We have seen many estates thrown into chaos because someone has haphazardly put pay-on-death (POD) and transfer-on-death (TOD) designations on all of their accounts. This deprives the estate of all cash and liquid assets. Sometimes this actually causes a probate to get the money back from the POD beneficiaries in order to pay leftover medical bills, utilities, taxes, funeral, and other obligations.
At Krause Estate Planning, we make the process as simple as possible so you don’t have to worry about the future. With more than 20 years of experience, Attorney Dan Krause has prepared countless estate plans and has helped families avoid probate while ensuring loved ones receive assets that were designated to them. Don’t leave your family scrambling or guessing how you wanted assets distributed — schedule a consultation by calling (608) 344-5491. We serve areas throughout Wisconsin including Madison, Milwaukee, Oregon, Middleton, Verona, Waunakee, Sun Prairie, and Janesville.