Also known as: nonprobate assets · non probate assets · nonprobate property · assets outside probate
Written by attorneys — see sources below.
An interest in property that passes at death by operation of law or by contract rather than under a will or by intestate succession. Title to such assets vests automatically in the surviving co-owner or designated beneficiary without probate administration. A will has no effect on the disposition of these assets when the form of ownership or beneficiary designation remains intact at death.
Nia Nkosi and Nadia Novak held their farmhouse as tenants by the entirety during their marriage. While divorce proceedings were pending but unresolved, Nia executed a will purporting to leave the farm to her nephew. Nia died still married with the tenancy intact. Title passed directly to Nadia by operation of law, and the will had no effect on the property.
Noah Nakamura named his wife Natasha Nielsen as beneficiary on his ERISA-governed life insurance policy and pension plan. After their divorce, Noah died without changing the designations. The proceeds and benefits passed directly to Natasha under the beneficiary designations rather than to Noah's estate or heirs under state law.
Donna Rae Egelhoff was married to David A. Egelhoff. Mr. Egelhoff was employed by the Boeing Company, which provided him with a life insurance policy and a pension plan. Both plans were governed by ERISA, and Mr. Egelhoff designated his wife as the beneficiary under both. In April 1994, the Egelhoffs divorced. Just over two months later, Mr. Egelhoff died intestate following an automobile accident. At that time, Mrs. Egelhoff remained the listed beneficiary under both the life insurance policy and the pension plan. The life insurance proceeds, totaling $46,000, were paid to her. Respondents Samantha and David Egelhoff, Mr. Egelhoff's children by a previous marriage, are his statutory heirs under state law. They sued petitioner in Washington state court to recover the life insurance proceeds. In a separate action, respondents also sued to recover the pension plan benefits. The trial courts, concluding that both the insurance policy and the pension plan "should be administered in accordance" with ERISA, granted summary judgment to petitioner in both cases. The Washington Court of Appeals consolidated the cases and reversed. Applying the statute, it held that respondents were entitled to the proceeds of both the insurance policy and the pension plan. The Supreme Court of Washington affirmed. Courts have disagreed about whether statutes like that of Washington are pre-empted by ERISA. The Supreme Court granted certiorari to resolve the conflict.
View caseNo. A will cannot dispose of nonprobate property held as tenants by the entirety or in joint tenancy with right of survivorship. When the testator dies while still married and the tenancy remains intact, title passes by operation of law to the surviving spouse.
Supporting sources
In states that augment the elective share, specified nonprobate transfers are added to the probate estate to calculate the spouse's share. The augmented estate includes certain lifetime transfers and beneficiary designations that would otherwise pass outside probate.
Supporting sources
No. Nonprobate assets transfer directly to the surviving owner or beneficiary by operation of law or contract. They never enter the decedent's probate estate and are not subject to will administration or creditor claims handled in probate.
…decree of dissolution or declaration of invalidity.” Wash. Rev. Code § 11.07.010(2)(a) (1994). That statute applies to “all nonprobate assets, wherever situated, held at the time of entry by a superior court of this state of a decree of dissolution of marriage or a declaration of invalidity.” § 11.07.010(1). It defines…