Not every estate has to go through the full probate process. In fact, many of the most common assets people own — life insurance policies, retirement accounts, jointly held bank accounts — pass directly to a named person at death, completely outside of court supervision. Understanding which assets skip probate and what planning tools can help can save your family significant time, money, and paperwork. Here is what you need to know.
What Is Probate, and Why Might You Want to Avoid It?
Probate is the court-supervised process of settling a deceased person's estate: validating the will, appointing an executor or administrator, inventorying assets, paying debts and taxes, and distributing what remains. The process is governed by state law, and how burdensome it is varies considerably. In some states probate is relatively quick and inexpensive. In others it can take a year or more and consume a meaningful portion of the estate's value in court costs and attorney's fees. Probate is also a public process — once a will is filed with the court, it becomes part of the public record.
For those reasons, many people prefer to arrange their affairs so that assets pass outside of probate wherever possible.
Assets That Pass Outside of Probate
Several common categories of assets skip probate entirely, passing directly to a named person at death regardless of what the will says:
Beneficiary Designations
Life insurance policies and retirement accounts — such as 401(k)s, IRAs, and similar accounts — let you name a beneficiary. At death, the proceeds or account balance go directly to that person without any probate court involvement. The will has no effect on these assets. Keeping beneficiary designations current is just as important as having a will — an outdated or missing designation can override your most carefully written estate plan.
Payable-on-Death and Transfer-on-Death Accounts
Many banks and credit unions allow you to add a payable-on-death (POD) designation to a checking or savings account. The named person receives the account balance at your death simply by presenting a death certificate — no probate required. Brokerage accounts often allow a similar transfer-on-death (TOD) designation. Some states also permit TOD designations on real estate (sometimes called a beneficiary deed or transfer-on-death deed), though availability varies by state.
Joint Tenancy with Right of Survivorship
When two or more people own property as joint tenants with right of survivorship, the surviving owner automatically inherits the deceased owner's share at death — without going through probate. This is a common way spouses hold real estate and bank accounts. Note that the property transfers specifically to the surviving joint owner, so this tool only works if that is exactly who you want to inherit. Adding someone as a joint owner also has other implications — including potential gift-tax considerations and exposure to that person's creditors — so understand the full picture before putting someone on a title.
Assets Held in a Living Trust
A revocable living trust is one of the most flexible ways to arrange for assets to pass outside of probate. Assets transferred into the trust during your lifetime pass at death according to the trust's terms, managed by a successor trustee, with no court involvement. For more on how living trusts work — including their limits — see our guide on revocable living trusts.
Community Property States
In community-property states, most assets acquired during marriage are treated as jointly owned by both spouses. At the death of one spouse, the surviving spouse's half of community property does not go through probate at all. The list of community-property states and the specific rules that apply vary, so check the law of your state.