Probate property is property that does not have a mechanism to transfer ownership at death. Examples of mechanisms to transfer ownership at death are beneficiary designations or a transfer on death designation affidavit.
Examples of probate property are bank accounts without beneficiary designations, automobiles titled in one person’s name, houses titled in one person’s name and without a transfer on death designation affidavit, household items, family heirlooms, etc.
A Will only dictates the transfer of probate property. A Will has no bearing on non-probate property.
For example: Andy executes a Will stating that all his property is to go to his two sons, Bob and Calvin evenly. Andy owns an IRA in which he designated his son, Bob, as beneficiary, several bank accounts jointly with his son, Bob, a house titled soley in Andy’s name, cash under Andy’s mattress, antique watch, and a car title in Andy’s name alone. When Andy dies, how will the property be distributed?
First, one must determine which is probate property and which is not. First, the non-probate property.
Andy’s non-probate property are the IRA and bank accounts. This property will go 100% to Bob, as he was designated beneficiary.
Andy’s probate property are his house, cash under his mattress, antique watch, and the car. This property will be distributed in accordance with Andy’s Will, 50% to Bob and 50% to Calvin.
This outcome may be counter to Andy’s true wishes. Many times older individuals will own a bank account jointly with one of their children so that the child can help them pay bills. What they often don’t realize is that those accounts are usually survivorship accounts, which means when they die, all the contents of the bank account will automatically be the property of the one child, rather than shared by all their children, as they put in their Will.
Take Away Lesson- Be aware of what property is probate and what is not and know that only your probate property will be distributed in accordance with your Will.
If you have any questions about how your Will will operate on event of your death, talk to an attorney.