Probate vs. Non-Probate Assets: What Assets Are Subject to Probate?

Probate has developed a bad reputation for bureaucracy and delay. If you recently lost a loved one and were tasked with probating the estate, you may fear the worst. But Nevada law limits the property that is subject to probate. You can simplify the probate process and limit the property that passes through probate through sound estate planning and working with an experienced probate and estate administration lawyer.

If you and your family need assistance with the Nevada probate process, the Vander Laan Law Firm, LLC, can help. Attorney Natalia Vander Laan can answer your questions, explain your options and obligations, and handle the probate process for you.

Overview of Nevada Probate

Probate is the legal procedure of changing the title of assets from the deceased person to the person or entity legally entitled to receive those assets. The probate court oversees the probate process, which typically involves appointing a “personal representative” of the estate, taking an inventory of the deceased person’s assets, ensuring valid claims against the estate are paid, and distributing the estate assets to the appropriate heirs and beneficiaries.

But not all assets are subject to the probate process.

What Assets Are Exempt from Probate in Nevada?

Understanding which assets are subject to the probate court’s oversight and which are not is integral to understanding the probate court process. Ms. Vander Laan can explain Nevada probate to help you identify probate vs. non-probate assets.

What Are Probate Assets?

Probate assets are owned solely by the decedent. They do not have co-owners or designated beneficiaries, and are managed by the decedent’s personal representative and distributed according to the terms of the will. If a person died without a will, assets are distributed according to Nevada’s laws of intestate succession.

Probate assets include:

• Real property titled solely in the name of the decedent or held as a tenant in common
• Personal property, such as jewelry, furniture, and automobiles
• Bank accounts held solely in the decedent’s name
• Any interest the decedent had in a partnership, corporation, or limited liability company that is not addressed by the succession plan of the business entity
• Life insurance policies or brokerage accounts that list the decedent or the decedent’s estate as the beneficiary

What Are Non-Probate Assets?

Non-probate assets have a co-owner, beneficiary, or transfer on death (TOD) or payable on death (POD) designation. They are not subject to probate court jurisdiction and do not pass through the probate process. Examples of non-probate assets include:

• Property held in joint tenancy or as tenants by the entirety
• Bank or brokerage accounts held in joint tenancy or having payable on death (POD) or transfer on death (TOD) beneficiaries
• Life insurance or brokerage accounts that list someone other than the decedent or the decedent’s estate as the beneficiary
• Property held in a trust
• Retirement accounts with listed beneficiaries

In cases where an asset is jointly owned with right of survivorship, the asset transfers to the co-owner(s). When there is a named beneficiary, these assets are paid directly to the beneficiary and are not transferred according to the terms of the will.

Asset Titling the Trusts as Part of Your Estate Planning Strategy

How a person’s assets are titled is an important part of estate planning that can be used to avoid having assets pass through probate. Jointly owned assets with right of survivorship pass to the co-owner at the time of the joint owner’s death.

Suppose you co-own your home with your spouse as joint tenants. Upon your death, the home will not be treated as a probate asset. Instead, ownership of the home will transfer to your spouse upon your death. Similarly, if you co-own the home with a child, the home becomes that child’s property upon your passing. While this method allows you to avoid probate, there are significant liability concerns and tax disadvantages.

You should also use beneficiary designations as part of your estate planning strategy. Many people treat beneficiary designations as an afterthought. But they are an essential part of your estate plan and can be used to minimize estate taxes and ensure your wishes are carried out. You should periodically review your beneficiary designations, especially after significant events such as retirement, the birth of a child or grandchild, marriage, divorce, or a death in the family.

A trust is a very comprehensive estate planning tool that can be used to avoid probate. A trust is a written agreement that establishes a fiduciary relationship between the trust-maker (also known as the grantor, settlor, or trustor), and the trustee. The trustee holds the assets placed in the trust and manages them for the benefit of a third party, known as the beneficiary. Unlike a Will, which must be admitted to and approved by the probate court, assets placed in the trust transfer outside of probate court.

Assets placed in the trust are non-probate assets and not subject to probate court jurisdiction. Different types of trusts are better suited to different estate planning situations. Ms. Vander Laan can evaluate your situation and provide advice on which estate planning strategies are best for you.

Contact the Vander Laan Law Firm, LLC, to Prepare Your Estate Plan

Once you understand what property passes through probate and which assets can be transferred outside the probate process, you can plan accordingly. Natalia Vander Laan can create your estate plan with the probate process in mind and help you and your family navigate the probate process after the death of a loved one.

To learn more, contact the Vander Laan Law Firm today to schedule a consultation to discuss your situation and how Ms. Vander Laan can help.