What Assets Are Exempt from Probate in Pennsylvania?

Certain assets are exempt from the probate process in Pennsylvania. Whether you are the executor of a will or just getting started on estate planning, it is important to understand which assets must go through probate and which assets can pass directly to beneficiaries. At Gross McGinley, LLP, our probate lawyers help clients understand estate administration and guide them through the process from start to finish.

What Is Probate?

Probate is the legal process in which a deceased person’s estate is administered and their assets are distributed to beneficiaries. Non-probate assets typically pass directly to designated beneficiaries, which can save time, money, and potential pitfalls associated with the probate process.

Non-Probate Assets

Jointly Owned Assets

Some of the most common non-probate assets are those held jointly with rights of survivorship. When one co-owner dies, the surviving co-owner or co-owners automatically inherit the deceased co-owner’s share of the asset, without the need for probate. Examples of jointly owned property include:

• Joint bank accounts
• Joint brokerage accounts
• Real estate held in joint tenancy
• Vehicles held in joint ownership

When estate planning, it is vital to speak to a probate attorney about how the ownership of certain assets is set up, if you want them to avoid probate. A probate attorney can also assist with the tax consequences that may be associated with non-probate assets.

Assets With Designated Beneficiaries

Certain assets allow you to designate beneficiaries who will inherit them upon your death. These assets typically pass directly to the designated beneficiaries outside of probate. Common examples include:

• Retirement accounts – IRAs, 401(k) accounts, pensions, and other types of retirement plans allow account holders to designate beneficiaries who will receive the account assets upon the holder’s death.
• Life insurance policies — Life insurance proceeds are paid directly to the designated beneficiaries named in the policy upon the policyholder’s death.
• Payable-on-death (POD) or transfer-on-death (TOD) accounts – Bank accounts, brokerage accounts, and investment accounts can be designated as POD or TOD accounts. This allows cash and assets to be transferred directly to named beneficiaries upon the account owner’s death. It’s vital to regularly review and update beneficiary designations, especially after life events like marriage, divorce, or the birth of a child.
• Assets held in trust – Typically, assets held in a trust are not subject to probate in Pennsylvania, as the assets are owned by the trust, not the individual. Assets held in trust for minor children are not subject to probate and are managed by a trustee until the children reach a specified age or milestone as indicated in the trust agreement. A trust can be a valuable estate planning tool that helps to ensure your assets are managed and distributed according to your wishes. It is important to consult an estate planning lawyer or probate attorney to find out which type of trust may be most beneficial for your specific circumstances.
• Small estates – In Pennsylvania, estates with a total value of $50,000 or less may qualify for a simplified probate procedure. This can save loved ones the time and expense of the traditional probate process. However, it is important to speak to a Pennsylvania probate lawyer who can advise you on whether an estate qualifies for this simplified estate administration process.

Some other assets that may be able to skip probate include certain types of real estate, annuities, transferable securities, and employee benefits such as pensions and stock options. An estate administration attorney can determine which are non-probate assets. This can help you avoid dealing with potential probate litigation and other issues that may arise.

An Estate Planning Attorney Provides the Legal Support You Need

Understanding probate asset exemptions and creating an estate plan that meets your specific needs can help ensure your assets are transferred efficiently and according to your wishes. In addition, having a solid plan in place can help make things easier for your loved ones at a difficult time. If you are the personal representative or executor of an estate, a probate lawyer can help the process run smoothly and assist you with probate litigation should any legal issues arise.

Contact an Experienced Probate Lawyer in Pennsylvania

At Gross McGinley, LLP, we understand estate planning and probate matters can be daunting. Over the last four decades, our probate attorneys and estate planning lawyers have built a solid reputation based on a commitment to continuous improvement, collaboration, integrity, respect, and compassion. To schedule a consultation with a probate attorney in Pennsylvania, contact us or call 610-820-5450. In addition to handling estate planning and probate matters, our dedicated team provides legal representation and services in the areas of criminal law, family law, commercial litigation, and more.