When someone passes away, some assets go through a legal process called probate, while others pass directly to beneficiaries. Knowing the difference can help families avoid delays and unexpected costs.
What are probate assets?
Probate assets are those that must go through the court system before heirs can receive them. These assets are usually in the deceased person’s name alone, with no designated beneficiary. Common probate assets include houses, cars, bank accounts without joint ownership, and personal belongings.
If the deceased left a will, the court oversees the process to ensure the distribution of assets according to their wishes. If there is no will, Maryland law decides who receives the assets.
The probate process can take months or even longer, depending on the complexity of the estate. It may also involve fees and paperwork that can slow down access to the deceased’s belongings. Families often find it helpful to understand what assets will go through probate ahead of time.
What are non-probate assets?
Non-probate assets transfer directly to beneficiaries without court involvement. These assets already have a designated person or entity listed to receive them. Common non-probate assets include life insurance policies, retirement accounts with named beneficiaries, and jointly owned property with rights of survivorship.
Bank accounts that have a “payable on death” (POD) or “transfer on death” (TOD) designation also bypass probate. Trusts are another way to ensure assets go directly to beneficiaries. Because these assets avoid probate, they usually transfer faster and with fewer costs.
Why does the difference matter?
Understanding probate and non-probate assets helps families plan for the future. Probate can delay access to assets and add expenses, while non-probate assets transfer more quickly. Those who want to make the process easier for loved ones may consider options like joint ownership, beneficiary designations, or trusts. Proper planning can help avoid complications and make it easier for heirs to receive their inheritance.