Probate is the legal process that takes place after a person passes away. It typically involves submitting a valid will to the surrogacy court in New York state, taking inventory of the deceased’s estate’s assets, paying off the estate’s liabilities and distributing the estate assets to the beneficiaries designated in the will. What assets go through probate though are not always what the deceased or the future beneficiaries expect. Only certain assets are considered probate assets and pass ownership through New York probate proceedings.
Probate assets are those who are owned individually by the decedent or person who has passed away. These assets are a part of the decedent’s estate because they have not been disposed of through other testamentary instruments like a trust or been passed on through a survivorship right or named beneficiary designation. Typical examples of a probate asset is all the property left in a person’s residence, the residence itself, bank accounts and cars.
Other assets that usually have beneficiary designations like a life insurance policy and retirement accounts are generally not considered a probate asset. However, they can become a probate asset if they do not have a valid designated beneficiary or if the estate of the deceased is the named beneficiary. Joint interests in common with rights of survivorship is not a probate asset. However, if there are no rights of survivorship, the joint interest is a probate asset.
Your Will Does Not Override the Transfer By Operation of Law
It is important to remember that your last will and testament can only leave assets and property that are in your estate to the people or entities that you designate. Any attempt to transfer assets that fall outside of your estate after you pass on will fail. Ownership of non-probate assets like those with beneficiary designations or joint interests with rights of survivorship will pass on automatically after your death. By law these designations and interests trump the directions left in a will.
Know Who Your Property Will Go To and How It Will Be Transferred
Because the beneficiary designations trump your belief that your property will be in your probate estate or who you believe that property will be left to, it is very important to know who you have as your designated beneficiary on policies like life insurance and retirement accounts. It is also important to understand the impact of assets or property that you own in common with someone else that have designated rights of survivorship. Failure to take these into consideration may result in your wishes not being respected or your legacy being much different than you had imagined it would be.
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