Monday, December 8, 2014

Q and A: Non-Probate Property

Q: My relative just passed away. It says in their Will that their IRA goes to me, but I found out that it is passing to someone else instead. What’s going on?

A: An IRA account is a type of asset called “non-probate property.” This means that regardless of what is written in a person’s Will, that asset will pass according to the operation of law; i.e., to the named beneficiary or co-owner of the asset.

Other examples of non-probate property include 401(k) accounts with named beneficiaries, POD and ITF accounts, jointly-owned accounts, and real estate owned as tenancy by the entirety or jointly with right of survivorship.

 It is extremely important to remember to update the beneficiaries of your bank, retirement, and other accounts periodically to ensure that your assets will be distributed the way you want at your death.

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