When creating an estate plan in New York, one of the most important things you need to understand is the distinction between probate and non-probate assets. Knowing which assets fall into which category can drastically affect the ease with which your estate is handled after you pass, and it may even affect the financial security of your loved ones. This page will explain what probate and non-probate assets are, how they are treated under New York law, and why it is so crucial to know the difference.
Richard H. Cole
Partner
Thomas F. Hewner
Partner
Donna L. Haslinger
Partner
Vivian P. Roche'
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Keith R. Rosso
Attorney
Tasha D. Frazie
Attorney
Tyler I. Wood
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Marc A. Cangé
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Teresa M. Cappiello
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What Are Probate Assets 
Probate assets are those that must go through the formal probate process when the person who owns them passes away. Probate is the legal process through which a deceased person’s will is validated, and their assets are distributed according to their wishes, or according to New York’s intestacy laws if there is no will. The probate process is overseen by a court and is often necessary to ensure that a decedent’s wishes are honored in a legal manner.
In New York, probate assets are typically those that are solely owned by the decedent and have no other form of transfer set up. For example, a person’s personal property, such as household items, cars, and artwork, would be considered probate assets if the decedent did not take any action to transfer those items to someone else before their death.
Other examples of probate assets include:
- Bank accounts held only in the name of the decedent
- Real estate solely owned by the decedent
- Personal property that is not included in a trust or passed to someone via joint ownership or beneficiary designation
- Retirement accounts that do not have a beneficiary designation
- Life insurance policies without named beneficiaries
These assets must go through probate to ensure they are distributed according to the will, or in the absence of a will, under state law. The probate process can be time-consuming and expensive, and this is why many individuals attempt to minimize the number of probate assets they leave behind.
The Probate Process
Probate can be a lengthy and complex process, especially when an estate is contested or has a significant amount of assets. It involves submitting the decedent’s will (if one exists) to the court, proving its validity, and appointing an executor to handle the estate’s administration. The executor is responsible for paying any outstanding debts, filing taxes, and distributing the estate according to the instructions provided in the will or according to state law if no will is available.
While probate is sometimes unavoidable, many people choose to minimize the number of probate assets in order to reduce the time and cost involved in settling their estates.
What Are Non-Probate Assets
Non-probate assets are those that are not required to go through the probate process. These assets pass directly to a beneficiary without the need for a court proceeding. Generally, non-probate assets are those that already have a designated beneficiary or co-owner, or those that are transferred by operation of law.
Common non-probate assets include:
- Jointly owned property, such as real estate or bank accounts
- Retirement accounts with named beneficiaries, such as 401(k) plans, IRAs, or pensions
- Life insurance policies with designated beneficiaries
- Trust assets, including assets that are placed in a living trust
- Payable-on-death (POD) and transfer-on-death (TOD) accounts, which allow for the direct transfer of the account’s balance to a named beneficiary upon the owner’s death
For example, a joint bank account that is shared by two people will pass directly to the surviving account holder without going through probate. Similarly, a life insurance policy that designates a beneficiary will pay out directly to the beneficiary, avoiding probate entirely.
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Why Non-Probate Assets Are Important
Non-probate assets can significantly streamline the process of settling an estate. Since they bypass the probate process, they can be transferred more quickly and with fewer associated costs. This can make the transition easier for your heirs and ensure that your assets are distributed according to your wishes without unnecessary delays.
Additionally, by using non-probate assets, you can avoid some of the public aspects of probate. Probate proceedings are public records, meaning that anyone can access information about your assets, debts, and who is inheriting what. Non-probate assets, on the other hand, are transferred outside of the public court process, ensuring a level of privacy for both you and your heirs.
How to Minimize Probate Assets
If you want to reduce the number of probate assets in your estate, there are several estate planning tools and strategies you can consider. These include:
- Creating a Living Trust: A revocable living trust allows you to place assets into the trust during your lifetime. When you pass away, the trust assets are distributed according to your instructions without the need for probate. A living trust can hold a variety of assets, such as real estate, bank accounts, and investments.
- Joint Ownership: Property owned jointly with another person automatically passes to the surviving owner upon the death of one owner. For example, if you co-own real estate or a bank account with someone else, those assets will not go through probate.
- Designating Beneficiaries: Many types of accounts, including retirement plans, life insurance, and even some bank accounts, allow you to designate a beneficiary. If you name a beneficiary, those assets will pass directly to that person upon your death without the need for probate.
- POD and TOD Accounts: Setting up payable-on-death or transfer-on-death accounts allows you to designate beneficiaries for specific assets. When you die, those assets pass directly to the beneficiaries without having to go through probate.
Why You Should Consult an Attorney
Estate planning can be complex, and it is essential to ensure that your plan aligns with your wishes and the law. While many people can create a basic estate plan on their own, working with an experienced estate planning attorney can help you navigate the more intricate aspects of New York estate law.
An attorney can help you understand the best strategies for minimizing probate assets, ensure your will and trust are properly drafted, and advise you on how to designate beneficiaries and create joint ownership arrangements. They can also provide guidance on how to handle the tax implications of transferring assets and how to ensure that your estate plan is valid and legally enforceable.
At Cole, Sorrentino, Hurley, Hewner & Gambino, P.C., we are committed to helping you protect your assets and ensure that your estate plan meets your goals. Our team of experienced attorneys is ready to provide you with clear, practical advice to help you navigate the complexities of probate and non-probate assets.
Understanding the distinction between probate and non-probate assets is crucial when planning your estate in New York. By taking steps to minimize the number of assets that go through probate, you can ensure a smoother, faster, and more private distribution of your estate. Whether you’re creating a will, setting up a trust, or designating beneficiaries, it’s important to have a clear plan in place. At Cole, Sorrentino, Hurley, Hewner & Gambino, P.C., we can help you navigate these decisions and create an estate plan that works for you and your loved ones.
If you’re ready to take control of your estate planning and minimize the impact of probate, contact Cole, Sorrentino, Hurley, Hewner & Gambino, P.C. today to schedule a consultation with one of our experienced estate planning attorneys. We’re here to help guide you through every step of the process.