How Property Passes Outside a Will (and Why It Matters)
What property doesn't go through probate in New York?
Not all property goes through probate. Understanding which assets bypass the process is key to planning your estate. Life insurance, retirement accounts (401k, IRA), and many annuities pass directly to the beneficiary you've named, regardless of what your will says. Joint property with a right of survivorship—for example, a home owned by spouses as joint tenants—passes to the surviving owner automatically, outside probate. Totten trusts (payable-on-death bank accounts) are savings accounts held in a kind of trust where you name a beneficiary, and the money goes straight to that person when you die, without probate. These non-probate assets are powerful planning tools: they reach heirs quickly without court involvement or public record. But they only work if you've actually named a beneficiary. If you name no one, these accounts may go through probate or follow state law. Review beneficiary designations regularly.
Beneficiary-Designated Assets
Life insurance policies, retirement accounts (401k, IRA, Roth IRA), and annuities all pass to named beneficiaries outside probate. You control where the money goes by naming a beneficiary on the account or policy documents. Beneficiary designations override your will, so keep them current with your wishes.
Jointly Held Property and Right of Survivorship
Real property and bank accounts held jointly with a right of survivorship pass automatically to the surviving owner when one owner dies. No probate is needed. The key is that the title document must actually state "right of survivorship" or use language indicating automatic transfer—tenants in common does not have this feature.
Totten Trusts and Payable-on-Death Accounts
A Totten trust is a bank or savings account held "in trust for" another person. When you die, the account passes directly to that beneficiary without probate. These are simple to set up and let you keep control during your lifetime while ensuring quick transfer afterward.
Advantages of Non-Probate Assets
Non-probate assets reach heirs quickly without court delays. There's no public record (unlike wills filed in probate), keeping your plan private. No court fees or legal costs for these assets specifically. But these tools only work if you've properly completed the beneficiary paperwork.
Mistakes to Avoid with Designations
Naming a deceased beneficiary, an ex-spouse, or an unintended person can cause disaster—that asset then goes through probate or follows state law. Outdated designations override your will. Check yours every few years, especially after marriage, divorce, or births. An outdated retirement account beneficiary can override what your will says.
When it is worth a call
- You're reviewing your life insurance or retirement account beneficiaries
- Your family situation has changed (marriage, divorce, birth of children)
- You own property jointly and want to understand the risks and benefits
- You want to make sure your non-probate assets align with your overall estate plan
Common questions
- Does naming a beneficiary override my will?
- Yes. Beneficiary designations take priority over your will. If your will says your child gets your retirement account but you've named your spouse as beneficiary, your spouse gets it. That's why keeping designations current with your wishes is critical.
- What does "right of survivorship" mean?
- It means when one owner dies, ownership automatically passes to the other owner(s) by operation of law, outside probate. This is common with jointly owned real property and bank accounts, but it matters whether the title document actually says "joint tenants with right of survivorship" rather than "tenants in common."
- Can I change a Totten trust?
- Yes. A Totten trust is fully revocable. You can name a new beneficiary, close the account, or change the arrangement whenever you want during your lifetime. You keep complete control until you die.
- What if my beneficiary dies before I do?
- Then the asset typically goes through probate unless you've named an alternate (contingent) beneficiary. Many beneficiary forms let you name a backup. Without one, the asset becomes part of your probate estate and passes under your will or state intestacy law.
Talk it through with Mitch
Bring the situation, not a diagnosis. A short conversation usually makes the next step obvious.