Inheritance law can be complex, especially when dealing with a loved one’s death. One key area that often puzzles beneficiaries is how probate and non-probate assets affect the distribution process.
For people in Arkansas handling these issues, grasping both concepts is essential. This short blog will explain the differences between the two, offering helpful information for those needing legal help during probate.
What are probate assets?
Probate assets, also called legal assets, pass through legal processes after death. The deceased owned these assets solely, and they have no survivorship features. Probate courts decide how to distribute them, often using the deceased’s will as a guide.
Whether an asset is probate or non-probate affects who can challenge the distribution and how taxes apply to the properties. Moreover, creditors can collect probate assets to cover the deceased’s unpaid debts and liabilities, if there are any.
What are non-probate assets?
Non-probate properties pass to beneficiaries through survivorship mechanisms. Executors distribute them via contracts or similar arrangements, bypassing the probate process.
This means they do not follow the decedent’s will or go through probate court. As a result, creditors cannot claim these assets to cover any debt.
Examples of these assets include life insurance payouts, will substitutes and living trusts. They allow people to distribute property outside the traditional probate system, simplifying the process for beneficiaries.
Learning the critical differences between the two may help you better understand the inheritance process in the state. This knowledge may help you make informed decisions about your loved one’s estate and potentially save time and money. Consider consulting a legal professional if you’re facing complex situations or have questions about specific assets.
