When someone dies in Washington, the legal process for his final legal and financial affairs are taken care of through the probate court. The probate court validates wills and confirms that personal representatives (sometimes called “executors”) named in the will agree to accept the job of managing the estate.
If the person has died intestate, which means without a will, the probate court will generally also handle who receives the assets and property of the deceased, according to the “rules of secession” set out by state law.
Regardless of whether or not there’s a will, during the probate process, assets are held and will not be distributed to beneficiaries until all other debts of the estate are paid. This can take months—or even years, if the estate is legally contested. Legal fees during the probate process can also reduce the overall value of the estate, resulting in smaller inheritances for beneficiaries.
As a result, a common question that attorneys are asked is whether or not all assets have to go through probate, so beneficiaries can receive assets earlier and without the extra time and expense of court. In the state of Washington, the answer is no. Not all assets have to go through probate, and with good estate planning, a great many assets can avoid probate.
Non-Probate Assets in the State of Washington
There are several types of assets that can avoid the probate process and be directly transferred to a beneficiary, even if there is no comprehensive estate plan. Some examples of these assets include the following:
- Personal vehicles. If the car was owned in joint tenancy with right of survivorship, the title can pass directly to the co-owner of the vehicle.
- Other property held in joint tenancy. If a house is owned jointly between a couple with a right of survivorship, and one partner dies, the surviving spouse will be able to receive the other half of the ownership interest in the house without probate.
- Payable-on-death bank accounts. Sometimes called a POD account or an account that’s “in trust” (such as an account held for a child of the deceased), the contents of these types of accounts can be transferred directly to their new owners.
- Transfer-on-death securities. TOD security accounts also have named beneficiaries, so they are considered non-probate assets.
- Designated beneficiary accounts. Life insurance policies and retirement accounts (such as IRAs or Keogh Plans) already have designated beneficiaries, so the court allows these assets to be transferred directly upon death.
- Community property. If the deceased has a Community Property Agreement in place, this property can go directly to the surviving spouse. If there is no CPA, then community property typically must go through probate before being distributed to the surviving spouse.
There are additional exemptions to the probate process that are based on the value of the estate. If the probate assets of an estate do not exceed $100,000 and the only assets are personal property, then a personal property affidavit may be all that’s required, and probate may be avoided entirely.
Other Exemptions to Probate
In Washington, certain small assets also may be considered non-probate, but only if there is no personal representative that has been or needs to be appointed. These types of assets may include:
- Bank accounts of up to $2,500
- Credit union accounts of up to $1,000
- Any remaining wages that haven’t yet been paid up to $2,500
- Unpaid social security benefits up to $1,000
- A car or a boat
One way to avoid probate is to place your assets in a living trust. This requires some legal forethought, but it can save your heirs and beneficiaries a lot of time and money and will ensure they receive a greater portion of the assets you leave behind.
If you have more questions about probate assets or how living trusts work and would like to talk to an attorney about your estate plan, the Law Offices of Molly B. Kenny would be glad to help you. Contact us by phone, or email to arrange a private consultation in our Bellevue office, and get started on an estate plan that’s right for you and your family.