Also known as: non-probate property · nonprobate properties · nonprobate assets
Written by attorneys — see sources below.
Property that passes directly to designated transferees upon a decedent's death by operation of law or under the terms of a contract or instrument rather than through the probate estate.
Nestor Navarro and his wife Nina Nielsen owned their home as tenants by the entirety. While divorce proceedings were pending but not finalized, Nestor executed a will attempting to leave his interest in the home to his daughter Nora Nash. Nestor died still married with the tenancy intact. Title passed automatically to Nina by survivorship outside of probate.
Norman Nash held an investment account with a payable-on-death beneficiary designation naming his wife Naomi Norton. Norman executed a will attempting to redirect the account to his brother Naveen Nanda. Norman died before any change to the designation. The account passed directly to Naomi under the beneficiary designation.
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 caseA will has no effect on nonprobate property. Such property passes directly to the transferees named in the governing instrument or by operation of law.
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Joint tenancy with right of survivorship, tenancy by the entirety, payable-on-death designations, and properly funded inter vivos trusts produce nonprobate property.
Pending divorce proceedings alone do not sever a tenancy by the entirety or joint tenancy. The property remains nonprobate until a final decree or other severance occurs.
Supporting sources
Some states include specified nonprobate assets in the augmented estate against which a surviving spouse may elect.
Supporting sources