Mistakes made in the handling of assets during probate may cost your family thousands of dollars as you distribute your loved one’s estate.
Knowing which estate assets go through probate in New Jersey can save time, reduce costs, and help you navigate your family seamlessly through the challenging estate closing process. Cosner Law Group is New Jersey’s leading probate law firm, and within this post, we explain the difference between probate and non-probate assets.
What Is Probate in New Jersey?
Probate is the court-supervised procedure that validates a will (if one exists), pays debts and taxes, and distributes the remaining estate assets. The Surrogate’s Court in the county where the deceased lived manages this process.
Probate helps ensure that the decedent’s wishes are respected and creditors are paid, but it can be time-consuming and sometimes costly. A key step in probate is identifying which assets are part of the probate estate.
Which Assets Go Through Probate in New Jersey?
Generally, probate applies to assets solely owned by the deceased that do not have designated beneficiaries or joint ownership arrangements that allow them to pass directly to someone else.
Below are the common types of assets that typically go through probate in New Jersey:
Solely Owned Real Estate
If the deceased owned real estate in their name alone, such as a house, condo, or land, that property generally must go through probate. The court supervises the transfer of ownership to heirs or beneficiaries.
Exceptions include real estate held in a trust or jointly owned with rights of survivorship, which usually passes outside probate.
Bank Accounts in the Deceased’s Name Only
Checking, savings, or money market accounts solely owned by the decedent will typically be subject to probate. Accounts with payable-on-death (POD) designations or joint owners often pass directly to the named beneficiaries or surviving joint owners.
Personal Property Owned Solely by the Decedent
Items such as vehicles, jewelry, artwork, furniture, and collectibles that are in the deceased’s name alone generally go through probate. Personal effects of sentimental or monetary value are inventoried and distributed through the probate process.
Investments and Securities in the Deceased’s Name
Stocks, bonds, mutual funds, and other investment accounts owned solely by the decedent and without named beneficiaries usually require probate.
Business Interests Solely Owned by the Deceased
If the decedent was a sole proprietor or owned a business interest individually, that entity must be handled through probate. Partnerships or corporations with buy-sell agreements or designated successors might have different rules.
Assets Without Beneficiary Designations
Any asset without a named beneficiary or joint ownership will likely undergo probate. This includes certain retirement accounts or life insurance policies if no beneficiary is designated or if the estate is the named beneficiary.
Assets That Typically Avoid Probate in New Jersey
Assets that do not go through probate can transfer relatively quickly and privately outside court oversight. Assets that typically avoid the probate process include the following:
Jointly Owned Property with Rights of Survivorship
Property co-owned with another person as joint tenants or tenants by the entirety passes automatically to the surviving owner. For example, a home owned by spouses as tenants by the entirety avoids probate.
Trust Assets
Property held in a living trust is managed by the trustee and distributed according to the trust terms without probate.
Retirement Accounts with Beneficiary Designations
IRAs, 401(k)s, and similar accounts with designated beneficiaries bypass probate and transfer directly.
Life Insurance Policies with Named Beneficiaries
Life insurance proceeds can transfer directly to beneficiaries without probate.
Payable-on-Death (POD) and Transfer-on-Death (TOD) Accounts
Bank and investment accounts set up to transfer on death avoid probate.
Why Is It Important to Identify Probate and Non-Probate Assets?
Probate can be a lengthy and sometimes costly process, involving court fees, executor fees, and administrative expenses. Assets that go through probate become part of the public record, which means less privacy for the deceased’s estate.
By contrast, assets that transfer outside probate can often be distributed relatively quickly and privately. For families, knowing which assets require probate helps set realistic expectations regarding the estate and allows loved ones of the decedent to plan accordingly.
The Steps to Identify Probate Assets in New Jersey
Executors or administrators of the estate must identify all assets owned solely by the decedent without beneficiary designations or joint owners. This usually involves taking on the following steps alongside a probate attorney.
- Reviewing bank and investment statements
- Checking property deeds and titles
- Examining insurance policies and retirement accounts
- Investigating business ownership documents
After identifying the assets, the probate attorney can then file the estate inventory with the Surrogate’s Court.
The Role of the Executor or Administrator in Managing Estate Assets
Once the probate process begins, the court appoints an executor (if named in a will) or an administrator (if there is no will) to manage the estate. Their responsibilities include the following:
- Collecting and valuing probate assets
- Paying debts, taxes, and expenses
- Distributing remaining assets to heirs or beneficiaries according to the will or New Jersey intestacy laws
- Filing necessary documents with the court
Frequently Asked Questions About Probate Assets in New Jersey
What happens if an asset owner did not designate a beneficiary?
Assets without beneficiary designations typically become probate assets and must be distributed through the court process.
Can I speed up the probate process for probate assets?
Planning with trusts or beneficiary designations can help, but once probate begins, the timeline depends on legal and administrative requirements.
Can Probate Be Avoided?
While certain assets naturally avoid probate, there are estate planning strategies New Jersey residents can use to reduce probate exposure, such as:
- Creating revocable living trusts
- Adding beneficiaries to financial accounts
- Holding property jointly with rights of survivorship
- Gifting assets before death
Consulting an experienced New Jersey probate attorney can help you understand your estate planning options and minimize probate complications.
Do small-value assets go through probate?
New Jersey allows simplified probate procedures for estates valued under $50,000, which can make handling small probate assets easier and faster.
Can probate assets be sold during the administration process?
Yes, the executor can sell probate assets with proper court approval when necessary to pay debts, taxes, or administration expenses, or when authorized by the will. For real estate sales, the executor typically needs specific court permission unless the will grants broad powers. Personal property can often be sold with less formal oversight, but significant assets may require court approval.
Book Your Free Probate Lawyer to Discuss Estate Assets
Understanding which assets go through probate in New Jersey will allow you to make more effective decisions for your loved one’s estate and reduce the risk of legal challenges during the asset distribution process. If you are unsure about specific assets or any of the steps within probate, consulting a qualified New Jersey probate attorney is always the best step.
Cosner Law Group has a 50-year history of helping New Jersey families protect their estates, reduce probate delays, and distribute assets per their loved one’s wishes. To speak with our probate attorneys, book a free probate consultation online or call (732) 937-8000 to discuss probate options with our team.
Additional Probate Resources:
Probating a Will in New Jersey