March 19, 2025

When you start dipping your toes into estate planning, one of the first things you’ll hear about is probate. It’s a word that often comes with a groan—usually because people associate it with paperwork, delays, and courts. But not all assets have to go through probate when you pass away. Some can skip it entirely. So, what’s the difference between probate and non-probate assets, and why does it matter? Let’s break it down in simple terms.

What Is Probate, Anyway?

Probate is the legal process that happens after someone dies to figure out who gets their stuff. If you own something in your name alone—like a car, a bank account, or a house—and there’s no clear instruction on where it goes, a court steps in to sort it out. It’s state-specific (and even local), which means the rules can vary depending on where you live. For example, in New Jersey, there’s a 10-day “cooling-off” period before anything can move forward, which can be a headache if you’ve got business interests that need quick attention.

Here’s the kicker: probate doesn’t care how much your estate is worth. Even if it’s just $5 in an account, it still might need to go through this process—complete with a death certificate, forms, and court approval. That’s why many people look for ways to avoid it altogether.

Probate Assets: The Ones That Need a Court’s Blessing

Assets that go through probate are typically those titled solely in your name with no built-in “next step.” Think of them as orphans—they don’t have a home to go to when you’re gone unless a will or the court says otherwise. Here are some common examples:

• A house in your name alone: If you own your home solo, it doesn’t automatically pass to anyone. It’ll need probate to transfer to your heirs.
• A bank account without a beneficiary: If it’s just “Jane Doe’s checking account,” it’s stuck in your name until probate moves it.
• Personal belongings: Jewelry, furniture, or that vintage record collection? Unless you’ve planned ahead, these might need probate too.

The process involves appointing an executor (or an administrator if there’s no will), gathering these assets, paying debts, and then distributing what’s left. It’s not impossible, but it can be slow and public—anyone can peek at the court records.

Non-Probate Assets: The Fast-Track Heirs

Non-probate assets, on the other hand, are like VIPs—they skip the probate line and go straight to their new owners. These assets have a built-in mechanism telling them where to go when you die. Here’s what qualifies:

• Jointly owned property with right of survivorship: Say you and your spouse buy a house together. In most states, it’s assumed you’re “joint tenants with right of survivorship.” When one of you passes, the house becomes the survivor’s—no probate required. Siobhan Kinealy, an estate planning attorney, gave a great example: a married couple’s home deed doesn’t need any extra steps to switch hands.
• Accounts with beneficiary designations: Life insurance, retirement accounts, or bank accounts with a named beneficiary (like “payable to my son, John”) pass directly to that person. No court needed.
• Transfer-on-Death (TOD) or Payable-on-Death (POD) accounts: These are similar to beneficiary designations. You might see “TOD” on a brokerage account or “POD” on a savings account. When you die, the asset transfers to the person you named. Valerie, a speaker in Siobhan’s presentation, pointed out that TOD and POD mean the same thing—handy jargon to know!

These assets are a “down and dirty” way to avoid probate, as Siobhan put it. They’re simple and effective, but they’re not perfect for every situation (more on that later).

Why Does This Matter?

Understanding probate versus non-probate assets is like knowing the rules of a board game—it helps you plan your moves. Probate can be a hassle for your loved ones: it takes time (weeks to months, sometimes years), costs money (court fees, lawyer fees), and can tie up assets when they’re needed most. For business owners, that delay could even disrupt operations. Non-probate assets, meanwhile, move fast and keep things private.

But there’s a flip side. Relying solely on non-probate tricks—like adding a kid to your bank account—can backfire. If they get sued or divorced, that asset could be at risk. Plus, it might not align with your bigger estate plan. That’s where professional advice comes in.

How to Use This in Your Planning

So, how do you decide what’s probate or non-probate? Start by taking stock of what you own. Check your titles and account forms. If something’s in your name alone with no beneficiary, it’s likely headed for probate unless you act. Here are a few beginner tips:

• Add beneficiaries where you can: It’s an easy fix for bank accounts or life insurance.
• Consider joint ownership: For couples, it’s a natural probate dodge—just make sure it’s what you want.
• Think beyond the quick fixes: A will or trust can give you more control and cover all your bases, not just the non-probate ones.

Probate avoidance is a big motivator for clients, but it’s not the only goal. A solid estate plan balances speed, control, and protection. Whether you’re dodging probate with a TOD account or a full trust, knowing the difference between these asset types is your first step.

Wrapping Up

Probate assets need a court’s help to find their new home; non-probate assets already have a map. Both play a role in your estate, and neither is inherently “bad”—it’s about what works for you. Want to keep it simple? Lean on non-probate options. Worried about the bigger picture? Talk to an estate planner. Either way, you’re now armed with the basics to start asking the right questions.

Reach out to Omni 360 for all your estate planning needs. Our team is ready to help you secure your financial future.