Also known as: non-probate transfer · nonprobate transfer · nonprobate transfers
Written by attorneys · grounded in primary & secondary sources — see below
Arrangements respecting property or contract rights that shift possession or enjoyment to a donee at the donor's death outside probate administration. The donor retains substantial lifetime dominion or control, including the power to revoke or alter the beneficiary designation. Common forms include revocable inter vivos trusts, life insurance policies, pension accounts, multiple-party bank accounts, payable-on-death designations, and joint ownership with right of survivorship.
Nalini Narula held a joint bank account with her husband Nolan Nunez at the time of his death. The account balance was $180,000 immediately before Nolan died. After his death the balance grew to $195,000 from interest. The court values Nalini's fractional interest at the pre-death figure for purposes of calculating the augmented estate.
Nathaniel Newman purchased a life insurance policy naming his wife Nyah Ndlovu as beneficiary. After their divorce Nathaniel died without changing the designation. The insurer paid the proceeds directly to Nyah. The court treats the payment as a completed nonprobate transfer that passes outside the probate estate.
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Nonprobate transfers made by the decedent to persons other than the surviving spouse are added to the augmented estate. The surviving spouse's own nonprobate transfers to others are also included when calculating the elective share amount. Amounts passing to the spouse by nonprobate transfer are applied first to satisfy the elective share before other recipients become liable.
Modern statutes automatically revoke revocable nonprobate dispositions and beneficiary designations in favor of a former spouse upon divorce. The former spouse is treated as having predeceased the decedent unless the governing instrument, a court order, or a property settlement expressly preserves the designation.
Transferees of nonprobate transfers may be liable to the probate estate for allowed claims and statutory allowances to the extent the estate cannot satisfy them. Liability is limited to the value of the nonprobate property received by each transferee.
…The court further concluded, “[Tyson Hall’s elective] share cannot be satisfied without including the value of the decedent’s non-probate transfers to others pursuant to N.D.C.C. § 35.1-05-02. As a result, [Tyson Hall] is entitled to the homestead in its entirety including any share of the joint tenant, Brianna McLaen . . . .” [¶19]…