nonprobate

Nonprobate refers to property that transfers to beneficiaries outside the probate process after a person dies. It includes assets held in joint ownership with right of survivorship, certain retirement accounts and life insurance, and assets held in trusts or registered in designated beneficiaries. These transfers occur by contract, by operation of law, or by the terms of the governing instrument, rather than by a will.

Probate is the court-supervised process that validates a will and arranges the distribution of probate assets. Nonprobate assets bypass this process because ownership passes automatically to the designated recipient, or to a successor trustee, upon death. The distinction matters for timing, privacy, and potential creditor or tax implications.

Common nonprobate assets include: joint tenancy with right of survivorship or community property with right of survivorship, which pass to the surviving co-owners; payable-on-death or transfer-on-death bank accounts and securities; life insurance policies and annuities with named beneficiaries; retirement accounts such as IRAs and 401(k)s with named beneficiaries; and revocable living trusts whose assets are controlled by a trustee and directed to beneficiaries after death.

From an estate planning perspective, avoiding probate can speed transfer and protect privacy, but it does not eliminate taxes or creditor claims in all cases. Provisions in wills, and pour-over trusts, and proper designation of beneficiaries are important. Some assets can become probate assets if a beneficiary predeceases the owner or if the asset lacks a valid designation in certain jurisdictions.