What is Probate?
“Probate” is the name of the process which permits an Executor to transfer assets as directed by a deceased person, or decedent, in his or her Last Will and Testament to recipients, or beneficiaries, according to the terms of the Will. The deceased person who made the Will is called the “testator.” In New Jersey, a Will must be probated in the county in which the testator resided at time of death or, for out-of-state decedents, in the county in which the decedent owned real property.
What is the Probate Estate?
Assets which pass to beneficiaries in accordance with a Will make up the “probate estate.” In order to transfer assets in the probate estate, a decedent’s Will must be probated. Whether a particular asset to be transferred on death must go through probate or not depends on how ownership (title) to the asset is held. The probate estate consists of assets held in the testator’s sole name, and monies owed solely to the testator. Thus, real estate, personal property, bank accounts, bonds, motor vehicles, and the like held in the testator’s name alone are probate assets. These assets cannot be transferred at the testator’s death without going through the probate process.
What is the Non-Probate Estate?
Not all assets must go through probate to be transferred to beneficiaries at a testator’s death. Some assets pass automatically to beneficiaries by operation of law without the need for probate. For example, assets owned jointly by the testator and another person, or owned by the testator with a right of survivorship in another person, are non-probate assets which pass by operation of law at the testator’s death to the surviving owner. In addition, assets which contain a beneficiary designation, such as life insurance proceeds, 401(k) plans, IRAs, pension and profit-sharing plans, pass at the owner’s death to the beneficiary designated by the owner. Similarly, “payable-on-death” (POD) accounts and “in trust for” (ITF) accounts are also non-probate assets which pass to the beneficiary outside of the probate process and are not controlled by the terms of the testator’s Will.
Planning To Dispose of Probate and Non-Probate Assets is Important.
The difference between probate and non-probate assets must be addressed in planning an estate to insure that your wishes concerning the disposition of your estate on death are carried out. Remember, only assets held in your sole name or with another person as “tenants in common” and which do not pass under a beneficiary designation will pass under the terms of your Will. You should keep copies of every beneficiary designation form with your important records. You should also review the ownership of each of your accounts to insure that the co-owner is the beneficiary to whom you wish the asset to pass upon your death.
(Adopted from the 2012 Edition of the booklet entitled “How to Probate A Will In The Bergen County Surrogate’s Court” published by the Bergen County Surrogate.)