Probate Basics: Non-Probate and Probate Assets

by | Apr 27, 2021 | Business Planning, Formation and Management, Estate Planning, Insights, Media

When do you need a probate?

In the second installment of our Probate Basics series, we are exploring whether you or your loved one will need a probate. When deciding whether a probate is necessary, there are several questions to consider.

A probate is necessary in Idaho if the decedent:

  • had a Last Will and Testament,
  • had an interest in real property (for example, a home or land), or
  • owned more than $100,000.00 in probate assets

But what are probate assets for purposes of calculating the $100,000.00 threshold?  The easiest way to answer this question is to consider what constitutes non-probate assets:

  • Trust Property. Property (real or otherwise) held in a revocable (or living) trust. If the decedent has a trust, the property in the trust will automatically transfer to the beneficiaries without the need of a probate. Watch out!  If you own property in another state, be sure the property is transferred to your trust.  If not, upon death, there may need to be an “ancillary probate” in that state.
  • Named Beneficiaries. Accounts or policies that specifically name beneficiaries are non-probate assets. These include most IRAs, insurance policies, annuities and pension plans.  Watch out!  Because these are non-probate assets, if you do not ensure the beneficiary designations are updated as you experience life changes, you may inadvertently disinherit some of your heirs or leave an ex-spouse entitled to inherit the entire account.
  • Pay on Death Designation. A bank account or investment account will avoid probate if the decedent prepared a “pay on death” or “transfer on death” designation.  Upon death, the funds will transfer directly to the designated individual.
  • Rights of Survivorship. If the property is in two or more persons’ names and is titled with “rights of survivorship”, whether joint tenancy or community property, the property will transfer without a probate.  Watch Out!  Joint ownership with rights of survivorship may avoid a probate, but only if at least one of the remaining joint tenants is alive and not incapacitated. Additionally, you may not want to rely on a joint tenancy if you have other assets you want to distribute to other heirs, or you’re concerned about your joint tenant’s potential divorce, lawsuit, or creditors.

Madsen Beck can help you decide if a probate is necessary and what assets are proper probate assets.  We can also assist you in your estate planning to ensure the best outcomes for you and your loved ones. Please contact us at 208-321-6384 to schedule a consultation.

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