When establishing a real estate plan in Colorado or anywhere in the U.S., you probably have come across the term probate several times. It is the process through which the law courts examine your assets before dispersing them to your beneficiaries after you die. Many people do not like making their families go through this process since it is very costly and not private. However, if you choose to take this process to help in the division of all your wealth, you need to understand everything that it involves.
Did you know that not all your assets have to go through probate? The only assets that you need to probate are those whose title is in your name. These assets may include real estate, vehicles, bank accounts, investments, and your home, among other assets. There are some assets that you own that do not need to go through probate. These include:
- Assets that you own jointly with a surviving owner
With such assets, the transfer is acted upon once the first owner dies. However, if the surviving owner also dies without having designated another owner, the assets will have to go through probate before it goes to the heirs.
- Assets with a valid beneficiary
These include assets like your retirement plan, insurance policies, and some bank accounts that allow you to name a beneficiary. Upon your death, the assets are paid directly to the recipient without the need for probate. However, if the beneficiary dies at the same time, the assets will go through probate alongside all your other assets.
- Assets that are in trust
If you have assets in a living trust, they will also avoid probate. However, by having a trust in your will, the assets will have to go through probate.
This information aims to educate you on the various assets and if you require to go through probate or not. It is not legal advice.