Understanding the Difference Between Probate and Non-Probate Assets

Understanding the Difference Between Probate and Non-Probate Assets

As you age, you may have specific wishes for how your assets will pass to your loved ones. This is where estate planning comes in.

However, it's not always so cut and dry. Even if you have a will, you'll want to understand some of the crucial differences between probate and non-probate assets to help you avoid extended court processes and delay the distribution of your assets.

What Is the Probate Process?

After you pass away, your estate will go into probate. In this legal process, a court reviews your will to determine authenticity. The court will appoint an executor (whom you can name in your will) to go through your assets, settle any outstanding bills, pay debts and taxes, and then distribute the remaining assets to beneficiaries.

Without a will in place, an estate goes into administration. The administrator will go through the estate, pay debts, find legal heirs and split up any remaining assets per state law.

Understanding Probate and Non-Probate Assets

Your will can play a critical role in streamlining the probate process. As you work on planning your estate with an advisor or legal professional, knowing the difference between your assets and their designations will help you understand how they will be distributed.

What Is a Probate Asset?

Probate assets are held exclusively in your name before your death. Examples include:

  • Bank accounts
  • Real estate
  • Automobiles or boats
  • Jewelry or furniture
  • Business interests
  • Life insurance policies that list the estate as the beneficiary

These assets must pass through the courts during the probate process and are distributed to your beneficiaries as listed in your will. If you don't have a will, the court will appoint an administrator to determine the next of kin for these assets. After that, your assets will be distributed according to the intestate succession laws of your state.

Keep in mind that your preferred beneficiary and your heir may not be the same person. If you have a desire to ensure your assets go to specific people, consider working with a lawyer to draft a will.

What Is a Non-Probate Asset?

A non-probate asset is an asset that already has a beneficiary designation. Examples include:

  • Retirement accounts, such as a 401(k)
  • Life insurance with a named beneficiary besides the decedent's estate
  • Bank accounts with a transfer or pay upon death arrangement
  • Any property, such as a home, held as a joint tenancy with survivorship rights
  • Any property held in the name of a trust

In these cases, since the assets already name a beneficiary, they are not controlled by your will (even if you don't have one). Instead, these assets will go directly to your named beneficiaries. For example, if your beneficiary is a trust, that trust will inherit those assets. If your assets are held in a joint tenancy or have a joint owner, such as your spouse on a home, then the surviving owner will inherit that asset.

Pros and Cons of the Probate Process

As you plan out your estate, recognizing probate or non-probate assets can help you determine which ones you want to go through the probate process and which will pass directly to named beneficiaries.


  • If you passed away with no will or listed any beneficiaries, the probate process could help determine proper legal ownership of your probate and non-probate assets.
  • Preplanning your probate assets to add a co-owner or right of survivorship can help ensure the probate process goes smoothly.
  • Listing beneficiaries on your non-probate assets can help avoid probate on those and ensure your beneficiaries get them quickly.


  • The probate process can eat up time. Even if you have a smaller estate and a will, your heirs and beneficiaries may wait months to receive your assets.
  • Going through probate is associated with legal fees and court costs. Those funds may have to come from your loved ones or out of your estate.
  • Probate is a public process. Your loved ones may have to spend multiple hours meeting with lawyers or going through court proceedings.

As you work through your estate planning, keep these different types of assets in mind. How you designate ownership and beneficiaries will guide the probate process.

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