People generally create wills to direct how their estate should be distributed after death. Many believe establishing a will requires a personal representative and/or the probate court to abide by the will’s exact terms. It is generally true that a will’s dispositive directions will be followed if the will is valid. However, a will’s dispositive provisions may be ineffective if the creator of the will (i.e., the Testator or Testatrix) fail to recognize the difference between probate and nonprobate property.
Probate property is directly owned property that does not have a legally recognized death beneficiary designation. An individual bank account that does not have a payable-on-death designation or tangible personal property, such as jewelry, artwork, or family heirlooms are examples of probate property.
Nonprobate property is property that possesses a legally recognizable death beneficiary designation. Individual bank accounts that have a payable-on-death designation or real property that is held in joint tenancy are examples of nonprobate assets.
It is important to understand the distinction between these types of property because nonprobate assets, which provide for their own beneficiary designation, will not pass under the terms of the will. Therefore, if a will’s provisions require that all assets pass to a child, but half of those assets are nonprobate assets containing death beneficiary designations of someone other than child, then the child will be entitled to only half of the estate.
These are just a couple of the reasons it is important to understand the difference between probate and nonprobate assets. If you plan to establish an estate plan, the attorneys at Morris, Hall & Kinghorn will assist you in determining the types of assets you have and will provide you options to help ensure your desires are met.
Contributed by MHK Phoenix Estate Planning Attorney Darren L. Richardson.
Why Choose Morris, Hall & Kinghorn:
You have a number of options when it comes to estate planning, so why pick Morris, Hall & Kinghorn? First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters. Also, MHK is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones. We are one of only two firms in Arizona that belong to the AAEPA and are the only firm in New Mexico that has been granted membership. If you have assets and loved ones that you want to protect, you are in good hands with MHK. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
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