8. Non-Probate Assets

Question 1

How are gratuitous transfers not governed by will or intestacy treated?

Answer 1

These assets must be removed from the decedent’s estate before distributing property under a will or via intestacy.

Question 2

Examples of gratuitous transfers not governed by will or intestacy:

Answer 2

1. Right of Survivorship
2. Contract Rights
3. Property Held in Inter Vivos Trusts
4. Property Over Which the Decedent Had a Power of Appointment

Question 3

How are contracts such as life insurance, retirement benefits, or annuities treated if they are made payable to the decedent’s estate?

Answer 3

If these contracts are made payable to the decedent’s estate instead of a named beneficiary, then they become probate assets.

Question 4

Toby has a $500,000 John Hancock life insurance policy that names his wife Jane as the beneficiary. Toby (still married to Jane) dies leaving a will that provides: “I direct that the proceeds of my John Hancock life insurance policy be paid to my brother Boris.” Who takes the $500,000 policy proceeds?

Answer 4

Jane, a will is ineffective with regard to non-probate property.