When Does an Asset Need to Be Probated? (Transcript)
D. "Rep" DeLoach III, Estate Planning and Board Certified Elder Law Attorney
An asset needs to be probated when someone dies and the assets are in their own individual name. So when the assets are in their own individual name, then basically no one can do anything with the assets. So an example that is a bank account, if someone passes away and the decedent had assets that are in their own individual name, then basically no one can access that bank account. In order to access that bank account, then the family or the survivors would need to go to court in order to access the account. In order to go to court to access the account, and typically the survivors would need to see an attorney because the probate process is a court process where the families cannot do it without going to court. And in order to go to court, then the family needs an attorney to help them as part of the probate process.
The probate process does not include all of the decedent's assets under most circumstances. A typical example of assets that avoid probate are going to be life insurance policies, IRAs, 401Ks or maybe annuities. And these assets would have beneficiary designations. And assets with beneficiary designations avoid probate because they go to the named beneficiaries on that account. When you purchase a life insurance policy, with a life insurance policy, you name a beneficiary and when you die those assets are distributed according to the beneficiaries they're on. So they're not distributed as part of the probate process. Those assets avoid probate and they just go to the named beneficiaries. When it avoids probate, that means the attorney is not involved with that portion of the process. The attorney and the court process is only involved in the process again if they're assets in their own individual name.