1. Which Assets Can Be Kept Outside Probate?
An asset's legal ownership determines how it passes at death. Individually owned property may require probate under a valid will or administration when no will exists. Property held under an effective survivorship arrangement or beneficiary designation generally follows a different route.
Bank Accounts and Beneficiary Designations
A bank account held solely in the deceased person's name generally belongs to the estate unless another transfer arrangement applies. A valid payable-on-death designation can direct the funds to a named beneficiary without probate.
The institution must follow the account's governing terms. If the beneficiary died before the account holder, those terms determine whether another beneficiary or the estate receives the funds.
Retirement accounts and life insurance policies also commonly use beneficiary designations. Their treatment depends on the relevant contract and applicable law, including federal rules for certain employer-sponsored retirement plans.
Joint Bank Accounts and Survivorship Rights
New York Banking Law § 675 addresses qualifying joint accounts established in a form payable to either account holder or the survivor.
Under § 675(b), that account arrangement provides prima facie evidence that the depositors intended to create a joint tenancy with survivorship rights. A person challenging the survivor's ownership bears the burden of rebutting that evidence, which may involve allegations of fraud or undue influence.
The presumption does not apply automatically to every account bearing two names. The account's registration and governing terms must satisfy the statute's requirements.
Joint Ownership of Real Property
EPTL § 6-2.2 generally treats a transfer to multiple owners as creating a tenancy in common unless the instrument establishes another recognized ownership arrangement. Special rules apply to qualifying transfers involving married spouses.
A deceased tenant in common's interest generally passes through estate succession rather than automatically to the other owners. By contrast, a valid joint tenancy with survivorship rights generally transfers the deceased owner's interest to the survivor.
Property held by married spouses as tenants by the entirety generally passes to the surviving spouse. The deed and circumstances of ownership determine whether that form of title applies.
2. How Should Wills, Trusts, and Property Titles Work Together?
A will, living trust, and ownership instrument perform different legal functions. A will directs the distribution of probate property, while a funded trust can hold assets under its own terms. Deeds and beneficiary records establish whether property has already been placed under another transfer arrangement.
Comparing Probate and Nonprobate Transfers
| Transfer Arrangement | Typical Treatment at Death | Main Point to Verify |
|---|---|---|
| Individually owned property passing under a will | Generally requires probate | Will and ownership record |
| Property held in a funded living trust | Generally passes under trust terms without probate | Completed transfer to the trust |
| Joint tenancy with survivorship | Generally passes to the surviving owner | Valid survivorship arrangement |
| Tenancy by the entirety | Generally passes to the surviving spouse | Qualifying ownership instrument |
| Tenancy in common | Deceased owner's share follows estate succession | Fractional ownership interest |
| Account with a valid beneficiary designation | Generally passes directly to the beneficiary | Current designation and account terms |
Individually owned property passing under a will
- Typical Treatment at DeathGenerally requires probate
- Main Point to VerifyWill and ownership record
Property held in a funded living trust
- Typical Treatment at DeathGenerally passes under trust terms without probate
- Main Point to VerifyCompleted transfer to the trust
Joint tenancy with survivorship
- Typical Treatment at DeathGenerally passes to the surviving owner
- Main Point to VerifyValid survivorship arrangement
Tenancy by the entirety
- Typical Treatment at DeathGenerally passes to the surviving spouse
- Main Point to VerifyQualifying ownership instrument
Tenancy in common
- Typical Treatment at DeathDeceased owner's share follows estate succession
- Main Point to VerifyFractional ownership interest
Account with a valid beneficiary designation
- Typical Treatment at DeathGenerally passes directly to the beneficiary
- Main Point to VerifyCurrent designation and account terms
These are general transfer rules. They do not determine whether a creditor, surviving spouse, or other claimant has a legally recognized interest in the property.
Creating and Funding a Living Trust
EPTL § 7-1.17 requires a lifetime trust to be in writing and executed under the statute's acknowledgment or witnessing requirements. When the creator is not the sole trustee, at least one trustee must also execute the instrument in the required manner.
Creating the trust does not automatically transfer the creator's property into it. Under EPTL § 7-1.18, merely identifying an asset in the trust instrument does not complete the transfer.
When the creator is the sole trustee, registrable property requires the applicable recording or registration formalities. Other property requires a written assignment identifying the assets with sufficient particularity.
An individually titled apartment or account may remain outside the trust unless the owner completes the required transfer. An estate planning and testamentary review can address the documents needed to establish the intended arrangement.
Condominiums and Cooperative Apartments
A condominium owner holds an interest in real property. Its recorded deed establishes the starting point for identifying the owner and determining whether survivorship rights apply.
A cooperative apartment generally involves corporate shares and an associated proprietary lease rather than direct ownership of the apartment as real property. The stock certificate, lease, and cooperative's governing documents may affect the transfer.
EPTL § 6-2.2(c) provides a specific rule for qualifying cooperative interests transferred to married spouses on or after January 1, 1996. Unless the instrument specifies another permitted form of ownership, such a transfer generally creates a tenancy by the entirety.
That rule does not automatically extend to unmarried co-owners or transfers outside its statutory scope.
3. What Can Disrupt an Estate Plan?
An arrangement that avoids probate may still produce an ownership dispute or affect another person's statutory rights. Problems arise when records conflict, a beneficiary designation is disputed, or a surviving spouse has rights that the plan did not account for.
Conflicting Beneficiary and Ownership Records
A will may name one heir while a bank account names another beneficiary. If the account has an effective beneficiary designation, that designation generally controls who receives the funds.
When a trust schedule conflicts with a deed or account record, the completed transfer documents become central to determining ownership. The evidence must establish whether the asset was actually transferred.
Claims involving fraud, undue influence, or lack of capacity require evidence relevant to the particular transfer. A disagreement among relatives does not, by itself, invalidate an ownership arrangement.
A Surviving Spouse'S Elective Share
Avoiding probate does not necessarily remove property from a surviving spouse's elective-share calculation.
Under EPTL § 5-1.1-A, a qualifying surviving spouse may claim the greater of $50,000, limited to the net estate's value if it is smaller, or one-third of the net estate. The calculation can include certain nonprobate transfers treated as testamentary substitutes.
The statute addresses qualifying joint accounts, survivorship interests, retained powers over transferred property, and other specified arrangements. Whether an asset is included depends on the applicable statutory conditions, exceptions, and any effective waiver.
A surviving spouse generally must serve written notice of the election and file it with proof of service in the Surrogate's Court within six months after letters testamentary or administration are issued, and no later than two years after death. Statutory extensions may apply.
These deadlines run from different events, and both ordinarily must be satisfied. Separate statutory limitations may also affect estates of individuals who were not domiciled in New York at death.
4. What Should Property Owners Review before Updating an Estate Plan?
The starting point is a record of what the person owns and how each asset would legally transfer. A plan prepared years earlier may no longer match current deeds, account registrations, or beneficiary forms. The review should identify discrepancies that could change the intended distribution.
Documents That Establish Ownership and Beneficiary Rights
The relevant records commonly include:
- Recorded deeds identifying real property owners and their ownership interests.
- Cooperative stock certificates and proprietary lease documents.
- Executed trust agreements and completed funding instruments.
- Bank and brokerage account registration records.
- Current retirement account and life insurance beneficiary designations.
- The original will and any valid codicils.
A deed answers a different question from a beneficiary form. The deed establishes the recorded ownership of real property, while the beneficiary form identifies who may receive a particular account or policy at death.
For real estate, applicable property transfer requirements must be considered before treating an intended conveyance as complete.
Will Execution Requirements
Under EPTL § 3-2.1, an ordinary will generally must be in writing and signed by the testator. The testator must sign before the witnesses or acknowledge an existing signature to them and declare the instrument to be a will.
At least two witnesses must attest the signature and sign at the testator's request within one 30-day period. The statute provides a rebuttable presumption that the timing requirement was satisfied.
That 30-day period concerns the execution of the will, not the deadline for beginning probate after death. Notarization alone does not replace the ordinary will's statutory witnessing requirements.
When Probate or Small-Estate Administration May Still Apply
A will generally requires probate before a nominated executor receives letters testamentary. When no valid will governs the estate, the Surrogate's Court may instead appoint an administrator.
New York also provides a simplified voluntary administration procedure for qualifying small estates. Under SCPA § 1301, the procedure generally concerns personal property with a gross value of $50,000 or less, excluding property required to be set off under EPTL § 5-3.1(a).
SCPA § 1302 excludes the deceased person's interest in New York real property from voluntary administration. However, owning real property does not automatically prevent use of the procedure for qualifying personal property.
A cooperative apartment generally involves personal property interests in corporate shares and a proprietary lease. Qualifying cooperative interests may therefore be handled through voluntary administration, while a condominium owner's real property interest cannot be transferred through that procedure.
Eligibility still depends on the estate's circumstances, the property's legal classification, and the governing transfer requirements. Separate probate administration procedures may be necessary for assets outside the simplified process.
5. Frequently Asked Questions
Can a Beneficiary Living Outside the United States Receive an Asset Without Probate?
Yes. A beneficiary's foreign residence does not automatically require probate when the asset passes through a valid nonprobate arrangement.
The financial institution may require identification and additional documentation before releasing the asset. Cross-border reporting or tax obligations must be assessed separately from the transfer itself.
Does Avoiding Probate Also Eliminate Estate Tax?
No. Probate and estate tax are governed by different rules.
Assets held in a revocable living trust may remain part of the creator's taxable estate despite passing outside probate. Federal estate tax arises under the Internal Revenue Code, while New York imposes its own estate tax.
Whether a return is required depends on the applicable tax rules and the estate's circumstances.
6. How an Estate Planning Attorney Can Help
An estate planning attorney can identify gaps between a property owner's intentions and the legal effect of existing documents. For Manhattan property owners, this may involve updating wills, reviewing trust funding, resolving inconsistent beneficiary records, and preparing documents needed to complete property transfers.
A review can also address surviving-spouse rights and ownership arrangements that may affect the intended distribution of assets.
22 Oct, 2026
