Do ALL Assets Go Through Probate?
Investopedia defines probate as “the general administration of a deceased person’s will or the estate of a deceased person without a will.” In other words, the court steps in to distribute a deceased person’s assets (which include bank accounts, real estate, and other financial investments). Probate doesn’t always happen, but when it does, it can be a nightmare. No one wants to have to deal with the legal system on top of dealing with their grief! The good news? You don’t have to pass the bar exam to learn more about probate! But specifically, let’s talk about your assets. Do ALL of them have to go through probate? Here’s what you need to know!
1. Individually-owned assets
In the words of Dame Julie Andrews, let’s start at the very beginning, a very good place to start. According to Free Will, if you happen to own an asset with another individual, like your spouse, they may assume complete ownership after you pass away without going through probate. For example, if you own a car with your spouse and both your names are on the paperwork, it wouldn’t need to go through the probate courts if you or your spouse passed away. The surviving spouse would claim full ownership! But assets that you solely own in your name may require probate. These individually owned assets include:
- Titled assets, such as a house, car, boat, or RV
- Investment accounts
- Bank or brokerage accounts
- Businesses
2. Assets with no beneficiary or designated transfer-on-death (TOD)
Most people write a basic will and leave it at that, without ever taking the time to learn about other, easier methods. The transfer-on-death designation is one such method. Speaking from personal experience, I worked at a transfer agency for almost two years and saw many stock accounts with a TOD on file. This made transferring the account to the beneficiary’s name extremely simple.
However, not everyone adds a TOD to their stock accounts or other financial assets. In those cases, assets will have to go through probate. If the beneficiary dies before you, you’ll have to remove their name from your account. Those cases can get a little dicey, so contact a financial advisor or estate planning attorney for a little extra help.
3. Solely-owned assets or assets owned as tenants in common
Tenancy in common is a little trickier to explain and understand. Basically, it’s when two or more parties share ownership rights to real property (per Investopedia). Sounds simple enough, right? But here’s where it gets tricky: it doesn’t offer rights of survivorship. Meaning that if one of the parties in this arrangement passes away, then their percentage of the property goes to their estate, not the other tenants.
While probate isn’t always required for tenants-in-common property, this type of arrangement won’t necessarily keep the asset out of probate court. According to Trust and Will, only the portion of the property in the deceased party’s estate would be subject to probate. Also, if a co-tenant lists beneficiaries in their will, they can typically avoid the probate process altogether.
4. Real estate
It shouldn’t come as a surprise to anyone that real estate isn’t immune to probate. This includes both land and buildings, like houses or businesses. The probate court will often get involved to transfer the property title to the beneficiaries named in the will. And while probate usually happens wherever the deceased person was living at the time of their death, real estate is a little different. According to Investopedia, probate for real estate may be extended to any country in which the real estate is located. Sounds like stress-induced hair fallout waiting to happen.
5. Life insurance policy with the estate as the beneficiary
We typically wouldn’t think of a life insurance policy as something the probate court might have to examine. But believe it or not, there are times when life insurance policies have to go through probate, just like any other asset! If your life insurance policy doesn’t have a named beneficiary, then it will go to the probate court. Your life insurance policy will also go through probate if the beneficiary has passed away or can’t be located (per Ask My Attorney). Also, if the beneficiary is a minor, it might have to go through probate. So, how can you avoid this? Consider adding a contingent (secondary) beneficiary to your life insurance policy. You can also make a trust your beneficiary, as well.
6. Assets in a trust
We’ve talked a lot about all the assets that do go through probate. By now, you’re probably eyeing your favorite antique tea set and wondering if it might even be subject to the probate court. But here’s the good news: any assets held in a trust will NOT go through probate. Yes, you read that right! When assets are held in a living trust, the trust itself is considered the owner of those assets. So, after you pass away, those assets aren’t considered part of your estate (per LegalZoom). In other words, if you want your loved ones to avoid the nightmare that is probate court, you might want to look into living trusts! Interested in learning more? Then click HERE for even more information about trusts!
7. Assets with a joint owner or designated beneficiary
More good news―jointly owned assets or assets with a designated beneficiary do NOT have to go through probate. These include jointly-held bank accounts or retirement accounts, like IRAs or 401(k)s. So, if you have a beneficiary, don’t worry. They won’t need to go through a lengthy or costly probate process.
8. Bank and investment accounts
Before I worked at the transfer agency, I worked for two years at a bank, so I can say with some degree of certainty that bank accounts are sometimes subject to probate. If you pass away without a will (or don’t have a beneficiary listed on the account), then your bank account will have to go through probate like any other asset. However, joint accounts or payable-on-death accounts (POD) can bypass the probate courts. Using my bank knowledge once again, I’ll add that in cases where a spouse passes away, you’ll probably have to open a new bank account solely in your name and transfer your assets into it. But every bank is different.
Meanwhile, investment accounts that are ONLY in the name of the decedent (the deceased person) will need to go through probate. This includes stocks and bonds. When I worked at the transfer agent, potential beneficiaries had to send a notarized copy of the will to us. If the stock account wasn’t listed among the assets, then the beneficiary couldn’t transfer the shares into their name. Sadly, the probate court took over from there.
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Originally published June 30, 2025
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