Non-Probate Assets

Non-Probate Assets

Typically a Non-Probate Asset (NPA) means an asset which either has beneficiary designations or is an account titled in a certain manner and is not necessarily controlled by a Will or Revocable Trust. Accordingly, it is important to understand and identify the NPA’s to make certain the estate plan is not inadvertently undermined. Examples of NPA’s include the following:

• Annuities
• Life Insurance
• Retirement accounts (i.e. IRA and 401(k))
• Bank Accounts
• Brokerage Accounts
• Individual owned Bonds and Securities
• Real Estate

Annuities, life insurance and retirement accounts are typically controlled by beneficiary designations. It is important to determine who are the Existing Primary Beneficiaries & Contingent Beneficiaries so decisions can be made whether it will be necessary to make any revisions to coordinate with the overall estate plan. Bank accounts, brokerage accounts, individually owned bonds and securities will generally pass upon death based upon the titling of the account or security.

For Bank accounts, if the accounts are titled “Joint Tenants With Right of Survivorship” (JTWROS) or Payable on Death (POD), then such account is considered a NPA. A JTWROS bank account will upon death of one tenant pass outright to the surviving joint tenant(s). A POD bank account will pass direclty to the named beneficiary.

For Brokerage accounts, if the accounts are titled “Joint Tenants With Right of Survivorship” (JTWROS) or Transfer on Death (TOD), then such account is considered a NPA. A JTWROS brokerage account will upon death of one tenant pass outright to the surviving joint tenant(s). A TOD brokerage account will pass direclty to the named beneficiary.

In short, the identification of NPA’s is very important in developing an estate plan.