What is the Difference Between Probate and Non-Probate Assets in New Jersey?

 

As you plan your estate in New Jersey, you should take the time to understand the differences between probate and non-probate assets. Although this might sound like complicated legal language, the underlying concept is relatively simple to grasp. More importantly, the distinction between these two different types of assets can have a substantial impact on your estate planning process. If you would like to gain a more in-depth understanding of how your estate will function after your passing, it is always best to seek out help from a qualified legal expert.

What are Probate Assets?

In New Jersey, the word “probate” simply refers to the legal process that begins after you pass away and your estate is handled by the courts. Probate assets are distributed to your heirs by the court. The overall probate process involves many moving parts, including a will, the executor of your will, paying various bills and fines, collecting or liquidating assets, and much more.

It goes without saying that probate can be a frustrating and lengthy process for your family members. Examples of probate assets include real estate property with you as the sole person on the title, bank accounts in your name only, or any personal items like jewelry, collectibles, or furniture.

What are Non-Probate Assets?

Unlike probate assets, non-probate assets are distributed directly to your designated beneficiaries. Family members do not need to go through the courts to receive these assets, and they take possession immediately. Examples include jointly-held property, property held in a trust, and retirement accounts. Non-probate assets are easy to handle in a legal sense because they are jointly owned. For example, you and your spouse may have joint ownership of a house. If one spouse passes away, the other becomes the sole owner by default, and no court process is necessary.

How Does This Affect My Estate?

The first thing you need to know is that your will cannot control what happens to non-probate property. The only way to control how non-probate property is distributed is to establish a trust. In addition, many individuals choose to pass with very little probate property in order to save their families the hassle of going through the courts, which can prove expensive and tiresome.

Creating Both a Will and a Trust

With both a will and a trust, you can control what happens to both probate and non-probate assets. It is up to you whether you would like to pass on with most of your assets in non-probate status, or whether you would like to maintain your probate assets. It is important to note that a living trust does not force you to give up your assets before you pass away. You can still use your money, enjoy your possessions, and live in your house until your last days. After this, your designated beneficiaries will immediately take possession without the hassle of a court process.

Getting Legal Help

If you would like to explore your options for wills and trusts, it is best to consult with estate planning experts. Reach out to Giro, LLP, Family Attorneys at Law today, and we can help you put everything in place.