What assets avoid probate?

The basic rule

Probate is needed only for property the person owned in their own name alone with no built-in instruction about who receives it at death. Anything that already has a legal mechanism for passing to someone else goes directly to that person, usually within weeks, with a death certificate and a claim form.

Assets that usually avoid probate

• Property in a revocable living trust — the successor trustee distributes it under the trust's terms. Only property actually titled in the trust's name counts.
• Life insurance with a living named beneficiary.
• Retirement accounts — 401(k)s, IRAs, 403(b)s and pensions with named beneficiaries.
• Payable-on-death (POD) bank accounts and transfer-on-death (TOD) brokerage accounts.
• Joint tenancy with right of survivorship — the surviving owner automatically owns the whole asset. Tenancy by the entirety, available to married couples in many states, works the same way.
• Community property with right of survivorship, in states that offer it.
• Transfer-on-death deeds for real estate, available in about 30 states and the District of Columbia.
• Transfer-on-death vehicle registration, offered in some states.
• Annuities with named beneficiaries.

Assets that usually go through probate

• Real estate titled only in the deceased person's name, without a TOD deed.
• Bank and investment accounts in their sole name with no POD or TOD designation.
• Vehicles, furniture, jewelry and other personal property without a transfer mechanism.
• A share of property owned as tenants in common, which has no survivorship right.
• Money owed to the deceased person, such as refunds or lawsuit proceeds.
• Any asset whose named beneficiary has already died, if no backup is named, or where the estate itself is the beneficiary.

Beneficiary designations override the will

A will cannot change who receives an account with a named beneficiary. If a will leaves “everything to my children” but a 401(k) still names an ex-spouse, the ex-spouse may receive it — the Supreme Court held in Egelhoff v. Egelhoff (2001) that federal law governs many employer plans. Some states automatically revoke designations of a former spouse after divorce, but not for all account types. Reviewing designations after marriage, divorce or a death in the family is one of the most valuable estate-planning steps.

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Small estates

Even assets that would normally require probate can often be collected through a simplified procedure if the total is below the state's small-estate limit. Limits range widely, from about $25,000 in some states to $208,850 in California (for deaths on or after April 1, 2025), and some states exclude certain assets from the count.

Things non-probate transfers do not avoid

• Estate tax — non-probate assets are included in the taxable estate.
• Creditors — in many states, creditors can reach non-probate assets if the probate estate is insufficient, and Medicaid estate recovery can reach some of them.
• Income tax — inherited retirement accounts are taxable to the beneficiary when withdrawn, generally within ten years for most non-spouse beneficiaries.
• Disputes — beneficiary designations and trusts can still be challenged for fraud, undue influence or lack of capacity.

Risks of joint ownership

Adding a child to a bank account or deed avoids probate but gives the child immediate ownership rights. The child's creditors or divorcing spouse may reach the asset, the parent loses sole control, other children may be unintentionally disinherited, and gifts of real estate can create tax problems. A POD designation, TOD deed or trust usually achieves the same result without those risks.

Planning checklist

1. List every asset and how it is titled.
2. Name primary and backup beneficiaries on every account and policy.
3. Consider a living trust if you own real estate in more than one state or want privacy.
4. Keep a will as a backstop for anything left out.
5. Review everything after major life events.

An estate planning lawyer can set up the right combination for your state and family.

Keep a simple written list of accounts and where documents are kept, so your executor or trustee can find everything quickly.