How does the executor know which assets are subject to probate?

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You may already know that the purpose of probate is to settle the affairs of your loved one’s estate. As executor, you may need to pay final expenses, creditors and taxes, gather all of the assets of the estate and distribute them.

That sounds simple enough, but sometimes distinguishing between what assets need to go through probate, and which don’t, can be a challenge. Depending on your loved one’s estate plan, you may not have to include some assets in the probate process. If your loved one failed to create at least a will, all of his or her assets will need to go through probate in order to transfer them to heirs.

Determining which assets to probate

A general rule of thumb is that if an asset has a beneficiary already designated to receive it; it goes directly to that individual or individuals. Some such assets include the following:

  • Assets held in a trust
  • Assets held jointly with the right of survivorship
  • Proceeds from insurance policies
  • Retirement accounts, such as a 401(k) or IRA
  • Transfer on death accounts

Trusts can include property that would otherwise ordinarily go through probate, such as real estate, personal property and cash. Transfer on death, or payable on death, accounts could include deposit accounts, investments and other securities. On the other hand, the following assets will need to go through probate:

  • Real estate not jointly owned with the right of survivorship
  • Cash
  • Deposit accounts without a TOD
  • Personal property
  • Assets held as tenants in common

In some cases, you may discover an asset that may include a beneficiary designation that your loved one never completed. Since there is no clear beneficiary on record, this asset joins the list of probated items.

Conflicts between the will and beneficiary designations

Sometimes, Wisconsin residents fail to change the beneficiary designations on certain accounts that they bequeath to another person in their wills. Under most circumstances, the named beneficiary will receive the proceeds from such an asset regardless of what the will may say.

Time until distribution

Heirs and beneficiaries often want to know the answer to this question. When it comes to those assets that pass to a beneficiary through a designation, TOD or right of survivorship, the distribution can occur quickly. When it comes to assets that go through the probate process, no easy answer exists. Numerous factors affect the length — and cost — of a probate. Smaller estates may be able to go through a simplified process that requires an estate to be below a certain amount and does not involve real estate that requires probate.

You may need assistance in order to ensure that the process goes as smoothly as possible and that you make distributions properly, whether through operation of the law or probate.