A question that a lot of people have following a relative’s death is what counts as a probate asset and what does not count as a probate asset. For some assets, the use of the word “and” or “or” can be the difference between an asset being a probate asset versus a non-probate asset.
Non-probate assets pass automatically to one or more designated persons after death by operation of law. The most common examples of non-probate assets are life insurance policies, retirement accounts and certain investment accounts with beneficiary designations. Financial accounts that are jointly owned or accounts with a payable upon death provision are non-probate assets. Real estate can also be a non-probate asset in South Carolina if it is jointly owned with rights of survivorship and not owned as tenants in common. The language in the deed to the real property will control in that situation. When it comes to vehicles, including mobile homes that have not been de-titled, if the vehicle is titled as an “or,” it will be a non-probate asset. For example, an automobile titled in the name of Husband OR Wife, Owner # 1 OR Owner #2 is presumed to pass to the other owner at the death of the other owner.
Probate assets are those types of property that do not automatically pass on to an heir by operation of law following a death. Common examples of probate assets are someone’s personal effects, such a clothing, tools, and jewelry. Vehicles, including mobile homes, where the vehicle is titled as an “and” title may also be a probate asset, as well as real property that is owned by only the deceased person or held as a tenant in common (i.e., husband and wife with no rights of survivorship identified in the deed). Bank accounts not jointly owned with someone else can become an estate asset as well.
These example of probate and non-probate assets are not exhaustive. It is advisable to consult with an attorney if there are any questions about dealing with estate issues and how probate assets and non-probate assets should be handled and dealt with through probate administration process.
Blog post by partner Ryan McCarty. Click here to learn more about Ryan.
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