Types of Assets That Must Go Through Probate in New York State
Understanding the Probate Process in New York
Probate is a legal process that occurs after someone passes away, in which their assets are identified, managed, and distributed to their beneficiaries or heirs. Depending on the state, not all assets go through probate, so it’s essential to understand which assets are subject to probate in New York. This article will explore the different types of assets that typically go through probate in the state.
An Overview of Probate
Before we delve into the specific types of assets that go through probate in New York, it’s essential to understand the basics of the probate process. The primary purposes of probate include:
- Validating the deceased person’s will, if one exists
- Identifying and inventorying the decedent’s assets and liabilities
- Paying any outstanding debts, taxes, and expenses
- Distributing the remaining assets to heirs or beneficiaries
Types of Assets That Usually Go Through Probate
1. Assets Held Solely in the Deceased Person’s Name: Any assets that are solely owned by the deceased person usually go through probate. This includes real estate, bank accounts, investment accounts, and personal property without designated beneficiaries or joint owners. For instance, if the person who passed away owned a house in their name only, it will likely have to go through probate in New York.
2. Personal Effects and Household Items: While not all personal property goes through probate, items of significant value may be subject to the process. For example, the probate estate could include valuable art collections or antique furniture.
3. Bank Accounts Without Beneficiary Designations: Bank accounts, such as savings, checking, or certificate of deposit (CD) accounts, that do not have payable-on-death (POD) or transfer-on-death (TOD) beneficiaries may go through probate.
4. Investment Accounts Without Beneficiary Designations: Investment accounts, including brokerage accounts and individual retirement accounts (IRAs), without designated beneficiaries, could be subject to probate.
5. Real Estate Without Joint Ownership: If the deceased person owned real estate solely in their name without joint ownership or a beneficiary designation, it typically goes through probate in New York. However, properties held as joint tenants with rights of survivorship or as tenants by the entirety generally avoid probate.
6. Business Interests: If the decedent owned a business, their ownership interests may go through probate unless there is a buy-sell agreement or other arrangement in place.
Types of Assets That Can Avoid Probate
While the above assets commonly go through probate, there are ways to structure your assets to avoid the process entirely. These include:
1. Assets with Beneficiary Designations: Assets with designated beneficiaries, such as life insurance policies, retirement accounts (e.g., 401(k)s and IRAs) with named beneficiaries, and payable-on-death (POD) or transfer-on-death (TOD) bank accounts, typically pass directly to the beneficiaries outside of probate.
2. Trust Assets: Assets placed in a living trust or other types of trusts usually avoid probate. The trustee manages and distributes these assets according to the trust’s terms, bypassing the probate process.
3. Jointly Owned Assets: Property held jointly with rights of survivorship or as tenants by the entirety automatically transfers to the surviving owner(s) upon the decedent’s death.
4. Assets with a Payable-on-Death Beneficiary: Certain financial accounts can be set up with a payable-on-death beneficiary, allowing the funds to pass directly to the named beneficiary without probate.
5. Small Estates: In New York, estates with a total value of $50,000 or less may qualify for a simplified probate process or may be exempt from probate altogether.
Proper Estate Planning to Minimize Probate
If you want to minimize the assets that go through probate, careful estate planning is crucial. Working with an experienced estate planning attorney, such as Morgan Legal Group in New York, can help you create a comprehensive plan to avoid or reduce probate. Strategies may include:
- Creating a revocable living trust to transfer assets outside of probate
- Updating beneficiary designations on financial accounts and insurance policies
- Establishing joint ownership arrangements
- Utilizing small estate procedures when applicable
- Consulting with legal professionals to ensure your estate plan aligns with your goals
Consult with Morgan Legal Group Today
Proper estate planning can help protect your assets and streamline the distribution of your estate. To ensure your wishes are carried out and to minimize the assets subject to probate, consult with the experienced attorneys at Morgan Legal Group in New York City. We specialize in estate planning and probate matters, and we can help you create a tailored plan that suits your needs.
Contact us today to schedule a consultation and start your estate planning journey.
