Do all assets have to go through probate?

Imagine John passes away. If John has a bank account, an investment account, or CDs in his name alone, those are all probate assets — they're individually owned, with no surviving co-owner and no payable-on-death beneficiary directing where they should go. The same is true for retirement accounts that have no beneficiary listed, or where the named beneficiary is also deceased and no contingent beneficiary was named.

Business interests are commonly overlooked here as well. If John owned a business in his individual name, his business interest is a probate asset and will need to be handled through the probate process. The pattern across all of these is the same: when the asset is individually owned, with nothing telling the financial institution or the court where it should go next, probate is what fills that gap.

Non-probate assets are anything that is either jointly titled or that has a valid beneficiary listed. A bank account held jointly with rights of survivorship passes to the surviving co-owner. A retirement account with a living beneficiary passes directly to that person. A life insurance policy with a current named beneficiary pays out to them outside of probate entirely.

When John passes away, his estate may include both probate and non-probate assets — and only the probate assets, the ones in his name alone, will need to go through court. That's why beneficiary designations and titling decisions are such a powerful estate planning tool. Used carefully, they can dramatically reduce how much of an estate ever ends up in front of a probate judge.