Legal Definitions - nonprobate

The term nonprobate refers to assets or methods of transferring assets that do not need to go through the formal court process known as probate after a person dies. Instead, these assets are transferred directly to designated beneficiaries based on pre-arranged legal agreements or designations, bypassing court supervision.

Here are some examples to illustrate what nonprobate means:

• Example 1: Life Insurance Policy

  Imagine Sarah has a life insurance policy and has named her brother, David, as the sole beneficiary. When Sarah passes away, the insurance company will pay the death benefit directly to David. This payment is a nonprobate distribution because the funds do not become part of Sarah's estate that would otherwise go through the probate court process. The life insurance policy itself is considered a nonprobate asset.

• Example 2: Jointly Owned Bank Account

  Consider a married couple, Maria and Roberto, who hold a joint savings account with "right of survivorship." If Roberto dies, the entire balance of the savings account automatically becomes Maria's property without any involvement from a probate court. The funds in this joint account are nonprobate assets, and their transfer upon Roberto's death is a nonprobate transfer, simplifying the process for Maria.

• Example 3: Transfer-on-Death (TOD) Deed for Real Estate

  Suppose John owns a piece of land and executes a Transfer-on-Death (TOD) deed, naming his daughter, Emily, as the beneficiary. This deed specifies that upon John's death, ownership of the land will automatically transfer to Emily. When John passes away, the land is transferred to Emily directly, without needing to go through the probate court. This land is a nonprobate asset, and the TOD deed facilitates a nonprobate transfer of ownership.