Nonprobate assets are assets in which the title has already been transferred within a decedent’s lifetime, or assets in which the transfer of title is controlled by some sort of survivorship mechanism. The property may pass to another party by way of contract or some other arrangement.
Under trusts and estates law, these assets are not probated, meaning that they are not distributed according to the decedent’s will in probate court. As a result, nonprobate assets are not subject to creditors’ claims. Despite not being part of the probate estate, these assets are part of the estate for purposes of inheritance taxes or estate taxes.
Common examples of nonprobate assets are life insurance proceeds, jointly-held property, will substitutes, and inter vivos trusts.
Nonprobate assets are sometimes considered in calculating the elective share, a mechanism that allows a surviving spouse to choose between an elective share calculation or under the decedent’s will. The inclusion of nonprobate assets in this calculation is determined by jurisdiction.
[Last updated in July of 2023 by the Wex Definitions Team]