Legal Definitions - nonprobate transfer

A nonprobate transfer is when property is transferred from a deceased person to another person without going through a probate court. This can be done in several ways:

• Living trusts
• Marital property agreements
• Survivorship marital property
• Joint ownership with right of survivorship
• Payable on death (POD) accounts
• Beneficiary designations on retirement plans, annuities, and life insurance policies
• Transfer on death (TOD) security registration

Nonprobate transfers have several benefits. First, the property is available immediately because it does not have to go through the probate process. Second, nonprobate transfers are private because they do not involve public proceedings. Finally, nonprobate transfers are less expensive because there are no court costs or attorney fees.

For example, if a person creates a living trust and transfers their property into the trust, the property will pass to the beneficiaries named in the trust without going through probate. Similarly, if a person designates a beneficiary on their life insurance policy, the proceeds will go directly to the beneficiary without going through probate.