Assets Excluded From Probate
Most people would rather avoid probate if possible. Avoiding probate tends to make the transfer of property upon one’s death a more streamlined, cost-efficient, and private process than having one’s assets revealed (and debts settled) in the much more public forum of a county probate court. Nashville estate planning lawyer Randy Ratliff understands your concerns and is here to help you develop a smart estate plan for your particular situation.
One of the most important things to know about “how to avoid probate” is that not all assets must be probated. By its very nature, some property is excluded from probate. The most important question to ask about whether an asset is excluded from probate is: how is the property owned? If the deceased person is the sole owner of a particular piece of property or asset (whether it is a house, a bank account, a car, a retirement account, or something else), and there is nothing in writing that will pass that property to someone else automatically upon the owner’s death, probate may be necessary. One exception to this is a situation in which someone leaves behind real property worth $25,000 or less. If this is the case, an heirship affidavit may possibly be used in order to keep the estate out of probate.Understanding Different Types of Property Ownership
In order to understand which assets are excluded from probate, one must first know some of the ways that property may be owned in the state of Tennessee (although different laws may apply to property owned outside the state). A typical individual may have property that is owned in several different ways and not even be aware of it. For example, most real estate owned by married couples in Tennessee is held as “tenants by the entirety.” When property is owned in this way, it passes automatically to the surviving spouse when the first spouse dies. There is no need to probate property owned as tenants by the entirety, since the deceased spouse does not leave anything behind to be probated – his or her share in the property ends at death.
Property owned with someone other than a spouse is different, as an estate planning lawyer can explain. Such property may be held as tenants in common, in which one partner’s share passes to his or her heirs – rather than the co-owner – upon death. Alternatively, it may be held as joint tenants with a right of survivorship, which, as the name suggests, results in the first co-owner’s rights passing to the survivor upon his or her death. Probate is usually required for property owned as tenants in common but not for property owned as joint tenants with a right of survivorship.
Additionally, certain kinds of property may have a “payable-on-death” (POD) provision, which, again, helps those left behind avoid probating those particular assets. This is often true with bank accounts, savings bonds, and other investments. Retirement accounts and pension plans may provide for a beneficiary to be named by the owner of the account. As long as that person survives the owner of the asset, probate can be avoided. Life insurance also passes to named beneficiaries in most cases without probate, although sometimes an estate itself is named as the beneficiary, in which case probate will probably be required. Some other assets, such as vehicles or household goods, may pass without the need for probate in some cases, but this is not always true. This is a very fact-specific issue and hinges on the type and value of the property, the relationship of the heirs to the deceased, and other issues.Schedule a Consultation with a Nashville Attorney
No matter your situation, it is advisable to seek the counsel of a knowledgeable estate planning attorney who can help you with a document such as a trust if your goal is to keep your entire estate out of probate, instead of just assets excluded from probate automatically. To schedule an appointment with the Law Offices of Randy Ratliff, PLLC, call us at 615-656-8282 or contact us online. We help clients throughout the greater Nashville area and Davidson and Williamson Counties, including in Goodlettsville, Joelton, Antioch, Hermitage, Madison, Franklin, Brentwood, and Cool Springs.