An important but sometimes neglected responsibility in administering an estate is to look for opportunities to preserve assets for distribution. Reducing estate taxes is one way that an estate can retain more of its wealth for the decedent’s heirs.
Probate and Non-Probate Assets
Probate assets are subject to court administration. Probate can be an expensive and long process and beneficiaries may have to wait any where from one to two years to receive the property left to them in the Will. Probate assets include assets owned only by the decedent that do not have a named beneficiary.
Non probate assets do not have to go through probate. These assets are typically distributed more quickly to the appropriate beneficiaries since a probate proceeding is not required.
Non probate assets generally include:
- Property held in a Revocable Trust Agreement
- Property owned in joint tenancy or tenancy by entirety with rights of survivorship
- Payment on Death (POD) bank accounts
- Transfer on Death (TOD) securities
- Life insurance policies that designate a beneficiary other than the decedent’s estate
- IRAs, 401(k)s, and other retirement plans that name a beneficiary other than the decedent’s estate