When it comes to estate planning in Virginia, assets are a critical element in the process. But probate and nonprobate assets are also a part of the process when estate planning is in progress. Probate is the process in which the will is verified, and the assets within that will are identified. Once identified, these assets are transferred to beneficiaries, heirs, and if applicable, creditors. Thus, these assets transfer according to the contents of your will. But nonprobate assets transfer outside of you will. We’ll examine nonprobate assets in particular.
What Assets are Considered Nonprobate for Estate Planning?
Assets for A Known Beneficiary: Typically, these assets occur when life insurance is involved. The life insurance in question is usually meant to be held for a known beneficiary – whoever will benefit from the policy itself. Other benefits that qualify under this categorization include IRAs and 401(k)s. These assets don’t normally fall under the purview of a will, per se. But they do transfer upon the death of policy or account owner instead.
POD Accounts: Known as payable on death, these are accounts that you can control and access throughout your lifetime. When you die, however, it transfers to others, known as payees, that you have designated. At any point before death, you can change the type of account and who will receive its benefits.
Joint Assets with Right of Survivorship: Real property and personal property are also considered to be assets. However, assets and properties can be shared, especially if the asset owners are legally regarded as joint tenants (co-owners) with equal undivided shares of interest. If one of the joint tenants attempts to transfer their share of interest to an outside third party, then the right of survivorship is revoked. When one of the joint tenants dies, however, their interest goes to the surviving co-owner. There is another version of joint tenancy reserved for spouses who are co-owners: this joint tenancy is known as “tenancy by the entirety.”
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