Navigating the probate process in New Hampshire can be complex, but understanding which assets require probate is a crucial first step. At its core, probate is the legal process of validating a deceased individual’s will (if applicable) and ensuring that their assets are distributed according to their wishes or state law. Not all assets, however, must go through probate. Below, we’ll explore which assets are subject to probate and which can bypass this legal process.
What Is Probate?
Probate is a court-supervised process. It begins with filing the deceased’s will (if there is one) and appointing an executor or administrator to manage the distribution of assets, payment of debts, and resolution of any disputes. Each state, including New Hampshire, follows its own probate laws.
Assets That Must Go Through Probate
Not all assets are treated the same when it comes to probate. Generally, assets that are solely owned by the deceased and do not have a designated beneficiary will need to pass through probate. Here are the most common probate assets:
1. Solely Owned Real Estate
If the deceased owned real estate solely in their name (e.g., a home or investment property), it will need to go through probate unless it was co-owned under certain special arrangements such as joint tenancy with rights of survivorship.
2. Bank Accounts Without Beneficiaries
Bank accounts solely in the deceased’s name without payable-on-death (POD) or transfer-on-death (TOD) beneficiaries will be subject to probate.
3. Vehicles and Personal Property
Cars, boats, or other assets titled solely to the deceased are treated as probate assets. Similarly, personal belongings with significant value, such as jewelry, artwork, or other collectibles, may also require probate.
4. Investment Accounts Without Beneficiaries
Investment accounts and stocks solely held by the deceased without designated beneficiaries or TOD designations generally must go through probate.
5. Business Interests
If the deceased owned a business or held an ownership interest (e.g., a sole proprietorship or shares in a privately held company) that was not otherwise accounted for in a legal agreement, this interest may need to be probated.
Assets That Bypass Probate
Certain assets can bypass the probate process entirely, saving time and expense for the family. These assets include:
1. Jointly Owned Assets with Rights of Survivorship
Real estate or bank accounts owned jointly with another person automatically pass to the surviving co-owner without probate.
2. Assets with Designated Beneficiaries
Life insurance policies, retirement accounts (e.g., 401(k)s and IRAs), and annuities with properly designated beneficiaries pass directly to the named individuals, skipping probate.
3. Trust-Owned Assets
Assets placed in a living trust are not subject to probate. Instead, they are distributed according to the trust’s terms, making this an effective way to avoid the probate process.
4. Payable-on-Death (POD) and Transfer-on-Death (TOD) Accounts
Bank accounts, securities accounts, and other financial instruments with POD or TOD designations go directly to the named beneficiary.
5. Small Estates
New Hampshire allows for simplified probate for small estates meeting certain value thresholds. This process is streamlined, allowing families to avoid full probate for modest assets.
Why Understanding Probate Matters
Understanding which assets require probate is essential for effective estate planning and ensuring a smooth transfer of wealth. Probate can be time-consuming and costly, and families may experience delays in accessing funds during the process. By identifying which assets need to go through probate and taking steps to minimize those that do, you can provide peace of mind to your loved ones.
Steps to Simplify the Probate Process in New Hampshire
To ease the burden of probate, consider these steps:
- Create a Comprehensive Estate Plan - Work with an experienced estate planning attorney to craft a will, establish a trust, and ensure that proper beneficiary designations are in place.
- Title Assets Properly - Where appropriate, consider joint ownership arrangements or POD/TOD designations for significant assets.
- Discuss Your Plans - Clearly communicate your wishes to your executor and beneficiaries to avoid misunderstandings after your passing.
Need Guidance Through Probate in Hampton, NH?
Probate can feel overwhelming, especially during a time of grief. At Beaton & Kiers, PLLC, we help New Hampshire families and individuals understand and manage the probate process. Whether you’re navigating probate for a loved one or planning ahead to simplify your own estate, our team is here to provide expert, compassionate guidance.
Reach out to us today at (603) 769-3491 for a consultation and take the first step toward peace of mind.