Probate vs. Non-Probate Assets: What's the Difference?

If you are in the process of creating a last will and testament, listing your assets is the first concern. It’s important to know that while you should include most of your possessions in your will, there are exceptions. A good estate plan highlights probate vs. non-probate assets, and an experienced Wills And Estates Lawyer can help you simplify the process. This guide breaks down the difference between the two and helps ensure that asset distribution occurs according to your wishes.

Why Establish the Distinction Between Probate vs. Non-Probate Assets?

Understanding the specifics of probate vs. non-probate assets is crucial to avoid unnecessary legal complications during the estate settlement. Learning what classifies as what, you can review your estate plan to make sure you include all your assets.

Some assets will be part of your will, while others may require you to designate a beneficiary. You may also need appoint another way to secure the ownership of all your assets.

Of course, legal help is a necessary step. Whether we are talking about navigating Ontario real estate law or planning the distribution of the property, legal advice and representation simplifies the process.

Not only do you take a vital step towards fulfilling your wishes, but also lessen the stress of the probate process for your loved ones. They don’t have to guess your intention or have to deal with personal fallouts. Your assets can change ownership easily and without legal issues when the right documents are present.

What Is Probate Property?

Probate property, better known as probate assets, are items, real estate, and belongings that a person has sole ownership over at the time of their death. These assets are the property of the deceased and must go through the probate process.

Probate is the court-managed procedure for settling an estate. It usually follows a Will or a detailed estate plan created with the aid of real estate lawyers in Toronto. Any assets without joint ownership, beneficiary designations, or any other permits to define the transfer of ownership must undergo probate. Some examples of probate ownership include the following:

• Physical personal belongings, like jewelry, clothing, and furniture.
• Vehicles registered solely in the name of the deceased person.
• Real estate owned exclusively by the decedent or shared as a tenant-in-common.
• Bank accounts held solely in the decedent’s name.

Any additional property, asset, or interest that the deceased owned is also a probate asset. Moreover, it requires a beneficiary to help transfer it to the chosen recipients.

What is Non-Probate Property?

Non-probate property, better known as non-probate assets, refers to any accounts, real estate ownership, or insurance policies that are shared by joint owners, owned by a Trust, or have a beneficiary designation that is not the decedent or their estate.

These assets bypass the probate process as there are legal arrangements in place, such as joint ownership with survivorship rights. Assets that include a transfer-on-death (TOD) or a payable-on-death (POD) clause will also evade probate. Here are a few examples of non-probate assets to clarify how to divide your assets during estate planning:

• Physical belongings or real estate held in joint tenancy with survivorship rights.
• Bank accounts or other assets held jointly in two or more names.
• Vehicles or recreational vehicles registered jointly in two or more names.
• Accounts designated as payable on death (POD) or transfer on death (TOD) or for the benefit of someone else.

Other examples of non-probate assets with a designated beneficiary are life insurance policies and retirement funds. Depending on the type of ownership in Canada involved, the division of the asset will require a beneficiary or Trust. The presence of an estate planning lawyer can help everyone better understand property division.

What Is the Difference Between Probate and Non Probate?

Differentiating probate and non-probate involves the legal classification of ownership, as it is during the lifetime of the deceased individual.

Any assets that the decedent has sole ownership over, without a beneficiary designation or any other clause that transfers ownership, must go through the probate process. On the other hand, assets that have a beneficiary or other means of designating ownership, and do not go through the will, are non-probate assets.

For example, a life insurance policy that designates a close family friend as the beneficiary does not need to go through a Will, or the probate process, to be allocated as per the wishes of the deceased.

It is necessary to specify the difference between probate and non-probate assets and how every solely owned asset is distributed. Moreover, your will is the means to do so. Any account, real estate, or asset that you do not have sole ownership over should have a beneficiary designation.

About Including Non-Probate Assets in Your Will

When it comes to probate vs. non-probate assets, it’s important to remember that non-probate assets don’t have to be part of your will. However, you can enlist the help of a law firm in Burlington and highlight transfer in the will. This is vital if you want to ensure that the other legal method goes through without doubts.

If you add a non-probate asset, it will get ownership according to beneficiary designation, TOD clause, or other ownership division. If these legal methods name the same beneficiary as in your will, there will be no issues.

On the other hand, if the individual mentioned in the will does not match beneficiary designation, TOD clause, or joint ownership division, these methods will take precedence over what is stated in the will.

Plan Your Estate with Reliable Legal Help Today

Planning your will and estate, and defining probate vs. non-probate assets not only makes a tough time easier but also enables you to ensure financial security for your loved ones. These distinctions make estate planning a complex process, but you do not have to and should not approach estate planning without sound legal advice and services.

Make sure that none of your loved ones are overlooked by examining each of your assets and determining how you wish their distribution. You achieve a significant sense of peace and reduce future stress for your family. Talking to an estate planning lawyer is the support you need to divide your assets properly and create legal documents that align with your personal estate planning and distribution goals. At Estofa Law, our wills and estate planning legal team can help you, reach out now.

Note: Direct professional legal advice holds ultimate precedence over random advice and information you get from other resources. Please consult an attorney from Estofa Law for advice tailored to your specific situation.