Ask an Estate Lawyer: What Assets are Not Part of an Estate?

POSTED ON: March 3, 2023
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You may assume that all your assets will be distributed according to the directions in your last will and testament after your death. But any estate lawyer will tell you that there are many assets that will not be included in your estate. Some of these assets include investment accounts, life insurance proceeds, non-probate assets, and jointly titled real estate assets. Often, these assets add up to more than the probate estate.

Your estate lawyer will likely recommend that you pay special attention to these assets when putting together your end-of-life affairs. Most retirement accounts, including IRAs, 401(k)s, and 403(b)s, go through the beneficiary designation and not your will. Additionally, investment accounts with a designated Payable on Death (POD) or Transfer on Death (TOD) beneficiary will not be included in your will.

Why is it essential to know which assets are included in your will and which ones have a beneficiary? If you are the benefactor of someone’s estate, their will may indicate that you are to receive the majority of the proceeds. But you may end up getting much less than you expect, even if you know the estate is worth much more, if you are not the benefactor listed on different accounts.

Keep in mind that when dividing inheritance, there is always tax liability of assets. If an asset does not need to go through probate, this does not always mean it is non-taxed. Depending on where the decedent lived and their beneficiaries, there may still be an estate or inheritance tax on all the assets.

If you have any questions about estate planning, an estate lawyer on our team can help. We’re happy to assist you.

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