slnlaw
  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Employment Contracts in Massachusetts
    • Discrimination in the Workplace
    • Employment Termination >
      • Massachusetts Paid Family Leave
      • Severance Pay
      • Unemployment in Massachusetts
    • Sexual Harassment at Work >
      • Sexual Harassment in a Small Business
      • Sexual Harassment and Non Disclosure Agreements
      • Sexual Harassment and Remote Work
    • Wage and Hour Laws
    • Independent Contractor Law
    • Non Compete Agreements >
      • Are non competes enforceable
      • Massachusetts Non Compete Act
      • Pre 2018 Massachusetts Non Competes
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection
    • Why You Need an Estate Plan
    • Why You Don't Have an Estate Plan
    • Estate Planning Documents >
      • Children with Special Needs
    • Planning for Assisted Living
    • Probate Process
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • About
    • Reviews
    • Slnlaw Offices
    • slnlaw core values
    • Publications and Interviews
    • New Client Intake and Consultation
    • Contact
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Jenna Ordway
    • Rebecca Rogers
    • Sharleen Tinnin
    • Elijah Bresley
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Massachusettts Unemployment FAQs
    • Severance Package FAQs
    • Medical Leave FAQs
    • Sexual Harassment FAQs
    • Employer FAQs
    • Civil Lawsuit FAQs
  • Blog

Understanding Non Probate Assets in Massachusetts

A common goal in estate planning is avoiding the need to go to probate court to distribute their assets. Many people do not understand which of their assets will bypass probate anyway. These are known as non probate assets.

There are three critical things you need to understand about non probate assets: what they are, when they might become assets subject to probate, and how they affect your liability for Massachusetts estate taxes.

What Are Non Probate Assets

If you own a home or other real property jointly with your spouse, title to that house will automatically pass to your surviving spouse without the need for probate court involvement. You may need to record the change at the registry of deeds, but you will not need a judge to sign off on the transfer.  Similarly, if you have transferred property subject to a life estate interest, that property will pass immediately upon your death.

If you have a life insurance policy, the proceeds will be transferred to your designated beneficiaries immediately upon proof of death. This too will happen outside of the court system.

If you have retirement savings or other brokerage accounts, you have the opportunity to designate a beneficiary for those funds. If you have a beneficiary, that will also transfer outside of probate.

Your bank or financial institution may also allow you to fill out a pay on death or transfer on death ("TOD") form for your bank accounts. This will allow the funds in those accounts to pass to your designated beneficiary outside of the probate process.

Need Help With Your Estate Planning?

Call (781) 784-2322
OR
Schedule a Free Information Call

Just Looking for Information?

Massachusetts estate planning guide slnlaw
Request Our Free E-Book

When Non Probate Assets Become Probate Assets

​If you do not keep your beneficiary designations up to date, some of these non probate assets may end up in probate anyway. For example, if you have only one beneficiary on your life insurance policy and that person predeceases you, the proceeds will have to pay into your estate.

If your estate is the beneficiary because of outdated designations, those funds will go to the heirs identified in your will. If you do not have a will, they will be distributed according to the state intestacy laws.

This is why many people list contingent beneficiaries. Most commonly they will list their spouse as primary and children as contingent. This means if the spouse dies first, the children will receive the funds outside of the court process.

Even if you are not ready to tackle a complete estate plan, a simple and critical thing you can do right now is to check your beneficiary designations and make sure they are up to date and reflect your wishes.

Non Probate Does Not Mean Not Taxable

A common misconception is that non-probate assets do not count for estate tax purposes. This is an expensive mistake that you cannot fix after you are gone.

Your home, for example, will pass to the joint owner, but it's value is still counted in determining the value of your taxable estate. The same is true of life insurance and retirement and brokerage accounts. Just because the assets will pass automatically does not take them out of the estate tax calculation.

That means if you have $500,000 in retirement savings, a $250,000 life insurance policy, and $250,000 in equity in your home, you will have a taxable estate in Massachusetts. Even though not a single one of those assets will pass through the probate process.

How to Plan for Non Probate Assets

As we have said, paying attention periodically to your beneficiary designations is critical.

You should also consult an estate planning attorney to understand whether you have to plan for estate taxes. There are steps you can take, especially if you are a married couple, to shelter some or all of those assets from taxes.

Finally, if any of your contingent beneficiaries are children, you should consider establishing a trust to receive the assets. Otherwise, if they receive assets before they are adults, someone will still have to go to court to establish a legal vehicle to hold and manage money for them.

How We Can Help

Probate assets estate planning lawyer Jenna Ordway
probate assets estate planning attorney slnlaw MA
probate and estate planning in MA slnlaw
We can help you assess your situation and make the right plan to protect your family and avoid or minimize taxes and court involvement.  We have a simple process for getting you from wherever you are now to executed and final documents.  It starts with an initial consultation, which is absolutely free.  You can use the button below to schedule your consultation, or simply give us a call at  781-784-2322.
Schedule a Free Information Call

Sharon MA

46 South Main Street
​Sharon MA 02067

(781) 784-2322
Serving Eastern and Central Massachusetts
Greater Boston Referral Resources
slnlaw solutions
Refer a Friend
slnlaw publications and interviews
​slnlaw privacy policy
Chester MA
26B Main Street
Chester MA 01011
(413) 667-2322
Serving Western Massachusetts
Western MA Referral Resources

Copyright 2022, slnlaw
  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Employment Contracts in Massachusetts
    • Discrimination in the Workplace
    • Employment Termination >
      • Massachusetts Paid Family Leave
      • Severance Pay
      • Unemployment in Massachusetts
    • Sexual Harassment at Work >
      • Sexual Harassment in a Small Business
      • Sexual Harassment and Non Disclosure Agreements
      • Sexual Harassment and Remote Work
    • Wage and Hour Laws
    • Independent Contractor Law
    • Non Compete Agreements >
      • Are non competes enforceable
      • Massachusetts Non Compete Act
      • Pre 2018 Massachusetts Non Competes
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection
    • Why You Need an Estate Plan
    • Why You Don't Have an Estate Plan
    • Estate Planning Documents >
      • Children with Special Needs
    • Planning for Assisted Living
    • Probate Process
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • About
    • Reviews
    • Slnlaw Offices
    • slnlaw core values
    • Publications and Interviews
    • New Client Intake and Consultation
    • Contact
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Jenna Ordway
    • Rebecca Rogers
    • Sharleen Tinnin
    • Elijah Bresley
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Massachusettts Unemployment FAQs
    • Severance Package FAQs
    • Medical Leave FAQs
    • Sexual Harassment FAQs
    • Employer FAQs
    • Civil Lawsuit FAQs
  • Blog