In 20 years of practicing law, I have seen general confusion about probate property and non-probate property.
My goal in this Post is to make the distinction between Oklahoma probate and non-probate property clearer. And to add another [hopefully] helpful layer to this question, not all probate property requires that a probate case be filed. More on that consideration below and in this post, When [and why] you might need to do an Oklahoma probate.
Probate Property
Probate property is any property (real, personal or otherwise) owned by someone who dies that is not set up to transfer automatically upon death. Some examples are helpful:
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Real Property.
An unmarried person dies owning a house and title to the house is solely in the deceased person’s name; although other states provide a process where title to real property can be transferred by affidavit, I am not aware of any similar process in the state of Oklahoma. I believe that the only way to transfer title to real property, where the person who died is the sole owner of the real property, is to get an order from a judge transferring title, out of a probate case.
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Life insurance.
A person dies leaving a life insurance policy with beneficiaries who are no longer living;
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Not transferred to Trust.
A person who has a living trust dies, but has a property that was never transferred to the trust such as real property or investment accounts;
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Accounts with no beneficiary.
Typically, with retirement accounts, investment accounts and many times on bank accounts, there is the opportunity to name a beneficiary. The beneficiary is the person or people who automatically receive the proceeds of the account (with proof of death of the owner and proof of beneficiary identify of course). If a person does not name at least one beneficiary on an account such as this, that usually means the account is going to probate. Without probate, the company holding the account will not release it; and
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Mineral Interests.
A person dies owning an Oklahoma mineral interest, but the interest is not held in a trust, and the title is solely in the name of the person who dies. Many times, the operator of the Well will not continue to pay royalties without an order from the Oklahoma probate court specifying who the heirs are.
No probate case required?
It is important to note that not all “probate property” requires a probate case. Large-scale items such as real property and mineral interests require probate to change the title. However, personal property with no title such as furniture, a gun collection or jewelry usually does not require a probate case. That is, personal property is usually passed without a problem outside of a probate case. You can read more about whether a probate case is required in this Post.
Non-Probate Property
Non-probate property is any property owned by someone who dies that is set up to pass to someone else through a system or contract. That means, there is a mechanism in place where the title to the property is transferred. Again, some examples will be helpful:
- Joint Tenancy Property
This is real property (such as your house), where there are at least two owners that own the property as “joint tenants with right of survivorship.” When one owner dies, the surviving owner becomes the owner of the property, without the need to do a probate case but with the need to do a couple of other legal formalities you can read about here. - Life Insurance
An insurance policy is a contract between you and the insurance company. As part of the contract, you are entitled to choose who the policy proceeds go to after you pass away. If you make at least one choice (i.e., designate a beneficiary), the person you choose will receive the policy proceeds without the need for a probate case. - Bank Accounts
This is converse of the “accounts with no beneficiary” label above in this Post. If you name a beneficiary on the account, then ownership of the account (or depending on the type of account, the account proceeds) should pass to the person you name, upon your death, no probate case required.
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