Assets that Don’t Need to Be Part of a Probate Estate in Pennsylvania
Black and Davison
If you have been named executor or administrator of an estate in Pennsylvania, you may have no idea of what that entails, or how much time and effort you’ll need to spend to settle the estate. You’ll have to prepare an accounting of the assets of the estate, notify all interested parties, pay all final debts and taxes, and oversee the orderly distribution of the estate. But not all of the assets owned by the deceased before death will necessarily become part of the probate estate.
The Types of Assets Are Not Included in the Probate Estate
One of the purposes of the probate process is to legally transfer property owned by the deceased, as he or she can no longer take the steps necessary to do that. Accordingly, if there’s property that was owned, in whole or in part, by the decedent, but no longer is, that property does not need to go through probate. How can that happen? Under property law, if property is owned “in joint tenancy,” upon the death of one of the owners, all right, title and interest in the property automatically goes to the other owners. It’s a common tool used to avoid the probate process—you title a home or a bank account jointly, and when you die, it automatically becomes the property of the other joint tenant(s).
Any financial instrument or asset that has its own designated beneficiary does not need to go through probate. For example, a life insurance policy, an IRA or 401k, or a “payable on death” bank account won’t have to be part of the probate estate.
Finally, any assets held in trust avoid probate. That’s because the property is not owned by the deceased, but by the trust.