When planning their estate, people often hear that probate can be slow and time-consuming. So many ask, What assets go through probate? Under South Dakota law, some assets must move through a court-supervised legal process, probate, before anyone can transfer them, while others can transfer outside probate.
McCoy PC is a South Dakota law firm that serves individuals and families in estate planning, probate, civil litigation, and criminal defense matters. Attorney Matthew McCoy leads the firm with a focus on clear explanations, practical planning, and helping clients understand how South Dakota law affects their real-world decisions.
When Does an Estate Have to Go Through Probate?
Probate is the court-supervised process that a person’s loved ones complete after the person dies. You do not need to use the probate process to transfer every piece of property that a person owned. Instead, an estate has to go through probate when it includes assets that lack a built-in method for transferring ownership at death.
From a practical standpoint, probate gives loved ones a legally recognized way to distribute certain property. It allows someone to step into a formal role, gather assets, address outstanding obligations, and transfer ownership in a way banks, title companies, and other institutions will accept.
The Role of a Will
A will is a document that gives loved ones instructions for distributing probate assets and names the person who should manage the process. A will does not eliminate the need for probate. It tells loved ones how to distribute assets that require probate.
Steps in the Probate Process
In South Dakota, probate usually includes:
- Filing probate documents with the appropriate South Dakota court;
- Appointment of an executor or administrator (personal representative), who manages probate assets;
- Notifying heirs, beneficiaries, and known creditors that probate has started;
- Identifying, gathering, and valuing probate assets;
- Paying valid debts and expenses;
- Distributing remaining probate assets; and
- Closing the probate estate.
The personal representative, usually with an attorney’s assistance, manages the probate process.
What Assets Go Through Probate?
Only probate assets go through probate. Probate assets require probate because they do not have another way to transfer to a new owner after their earlier owner dies. An asset usually requires probate when it:
- Has no co-owners,
- Offers no beneficiary designations, and
- Has no survivorship rights.
In short, probate assets are assets someone owned at death that lack a built-in method for ownership transfer.
What Assets Can Avoid Probate?
Assets that can avoid probate are those that directly specify how someone else becomes the asset’s new owner. People who receive non-probate assets have to take administrative steps, such as notifying a bank about a joint account owner’s death, but they do not have to complete probate for those assets.
Assets with Beneficiary Designations
Common examples include:
- Life insurance policies,
- Retirement accounts such as IRAs and 401(k)s, and
- Bank accounts labeled payable-on-death.
Because of the beneficiary designations, these assets can transfer directly to the named beneficiary after they provide documentation of the death and their identity.
Jointly Owned Property with Survivorship
You can title property to be jointly owned with survivorship rights. Joint ownership with survivorship rights allows the owner who lives longer to receive full ownership when the other owner dies. Joint bank accounts and real estate sometimes include survivorship rights and are commonly used by spouses.
Trust-Owned Assets
A trust owns property, which a trustee manages for designated beneficiaries under written instructions. As long as the trust has terms specifying how assets should transfer upon the death of the trust’s creator, trust assets pass outside probate according to the trust terms.
Examples of Probate Assets Compared to Non-Probate Assets
To determine whether an asset requires probate, you need to understand how the deceased person owned the property, not just the type of property involved.
For example, loved ones must use probate to distribute a bank account when the deceased person held the account in their individual name and the account does not have a transfer feature. Real estate requires probate when the deceased person owned the property solely in their name and did not use non-will estate planning tools to declare what should happen when they die. In that situation, loved ones must rely on probate to obtain the authority needed to transfer title.
Additional common examples of probate assets include:
- Vehicles titled in one name. Cars, trucks, motorcycles, and recreational vehicles titled solely to the deceased person often go through probate.
- Individually owned personal property. Furniture, jewelry, tools, and collectibles usually pass through probate when the deceased person owned them individually and did not place them in a trust.
- Business interests. Closely held business interests may require probate unless buy-sell agreements, transfer-on-death provisions, or trust ownership govern the transfer.
During estate planning, you have many options to transform probate assets into non-probate assets.
Frequently Asked Questions
1. Which Assets Must Go Through Probate Under South Dakota Law?
Assets without a built-in transfer mechanism require probate, such as those owned individually without beneficiary designations or survivorship rights.
2. Does Real Estate Always Require Probate?
No. You can structure ownership to avoid or minimize probate.
3. Do Bank Accounts Have to Go Through Probate?
Bank accounts require probate when the owner held them individually and did not name a payable-on-death beneficiary. Otherwise, they can bypass probate.
4. What’s the Difference Between Probate and Non-Probate Assets?
Probate assets require loved ones to use probate to distribute them. Non-probate assets transfer using other legal processes.
5. Can I Structure My Estate to Avoid Certain Assets Entering Probate?
Yes. Proper estate planning can reduce the number of assets your loved ones must distribute through probate.
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Talk to a South Dakota Probate and Estate Planning Attorney
Understanding what assets go through probate helps people plan realistically and avoid surprises. How you title assets today determines how they transfer tomorrow.
McCoy PC helps South Dakota clients navigate probate and make informed estate planning decisions. To review your assets or discuss probate concerns, contact McCoy PC today.