What assets are not considered part of an estate?
What assets are not considered part of an estate?
When thinking about what assets are not part of an estate, it's important to understand the definition of an asset. An asset is anything that has value and therefore can be owned by a person or business. Assets can include tangible things like houses, cars and computers; intangible items such as patents and trademarks; stocks and bonds; bank accounts; or even collectibles or investments. There is no hard-and-fast rule defining exactly which assets are considered part of someone's estate. It's more about whether the assets will have to pass through a probate court to be distributed after the owner dies, or if they can be transferred directly through an alternate means.
Like many things in life, the details of the probate process can get a little confusing. For example: What does it mean when someone says their estate is "intestate"? The word "intestate" refers to a person whose death is not handled by a valid will. An intestate estate can be confusing, because it might lead you to think that all of the deceased's assets are considered part of the estate. However, this is not actually the case.
Certain assets are specifically excluded when calculating an estate's value. These assets are called "non-probate" assets, and they include:
- Property held by a surviving spouse through joint tenancy or tenancy by the entirety
- Life insurance proceeds payable to a named beneficiary
- Payable on death (POD) bank accounts and certificates of deposit (CDs)
- Property held in trust for another person or organization
- IRAs, 401(k)s, annuities, and other retirement accounts (including those owned by a business), which contain beneficiary designations.
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Disclaimer: This is not legal advice and is simply an answer to a question and that if legal advice is sought to contact a licensed attorney in the appropriate jurisdiction.
