The reason why the public is encouraged to get their affairs in order before they pass away is so that their assets are distributed according to their wishes. The process of ensuring that each asset makes it to the correct heir is called probate. If all the instructions are left for the courts, there should be no delay. The quicker the will is proved to be valid, the sooner everyone receives their inheritance in Pennsylvania or another state. As you plan your estate, keep in mind that there are four main categories of assets.
Individual Assets
Individual assets include bank and investment accounts as well as vehicles, boats and real estate that does not have a co-owner attached. These assets are only owned by the individual who has passed away. These assets are also paid in full. It can be anything, such as artwork, electronics and memorabilia, including items that have no real value.
Tenants-in-common Property
Tenants-in-common property, on the other hand, is the category of assets where co-owners do exist. The percentage of ownership does not have to be equal among the members. In this case, the percentage a probate court takes a look at is the deceased individual’s only. Essentially, that is the percentage that is going to get passed on to an heir. Real estate and other assets can be re-named to the heir before the individual passes away. This helps assets avoid estate litigation.
Beneficiary Assets
Beneficiary assets include IRAs, 401ks and annuities. These are assets that allow the designation of a beneficiary when they are opened. When the individual passes away, these assets avoid probate except when the beneficiary passes away before the individual. If they no longer have a beneficiary, they go into probate, and the court makes a decision.
Assets Left Out of a Trust
Living trust assets sometimes go into probate because the individual acquires additional assets and does not designate them to anyone. If this happens, the assets end up in court.
For more guidance on the probate process, asset distribution and asset categories, estate litigation legal professionals are available to help. A qualified attorney may help an individual set up and regularly update their estate plan.
