When a loved one passes away, it may be necessary to probate the estate of the deceased. Probate is the process during which the assets that belonged to the deceased are distributed to beneficiaries. Accordingly, the first step in this process will be to determine what is included in the estate. This can actually be more complicated than it seems at first glance, especially where the deceased had a large number of assets that may be held and titled in different ways, ranging from insurance policies to real estate. Having a grasp of what will and will not be included in the estate for probate purposes can give important insight on estate planning basics.
The most basic types of property included in the estate are any property that is titled solely in the name of the deceased. This can include real estate, bank accounts, or vehicles. It will also include any personal property or household items that belonged solely to the deceased. Even if the property is held jointly with another person, it could be that the share of the property owned by the deceased will still be part of the estate subject to probate. For example, if the deceased owned real estate as a tenant in common with another person, the surviving person does not automatically inherit the deceased’s share of interest in the property. Instead, unless the title specifies otherwise, the deceased’s share of the property must pass through probate.
Debts owed to the deceased that were payable before death are also part of the estate. This is true even when the debt or amount payable is not paid until after the deceased passes away. This would include such things as a settlement springing from the manner of the deceased’s passing, such as death benefits from workers’ compensation, the deceased’s final paycheck, or money owed because of services performed by the deceased.
The big asset that is notably not part of the estate is life insurance proceeds or other types of assets that pass directly to a beneficiary. Life insurance proceeds are not paid into the name of the deceased or the estate before passing to the beneficiary, and accordingly are not typically a part of the estate.
Estate planning requires the assistance of an experienced attorney to help make sure that your future is secure. Contact us today at (320) 299-4249 to discuss your estate and your beneficiaries.