Payable on death is a designation allowed on bank accounts, for example. Theoretically, if a person designates a person/people/organizations to be paid on death, the account’s assets would pass to that person/organization outside the probate process and would not be considered assets of a decedent for purposes of their estate distribution. But, states are divided on how to treat POD designations on accounts. Some states agree that POD accounts are like nonprobate assets, but other states deem POD designations to be invalid.
Personal property is anything that is not real property. While this is a circular definition, you can think of personal property as anything that is movable – from a dining room table to a diamond ring.
A personal representative is a person appointed by the probate court to carry out the administration of a decedent’s estate according to the wishes of the decedent as described in the will (if applicable) and according to state law. The difference between a personal representative and an executor is an executor generally refers to a person named in a will and a personal representative is not named in a will. Some states use the terms interchangeably, though.
For states that make the distinction, the presence of a personal representative (as opposed to an executor) typically occurs in one of two ways. First, if a person dies without a will, the probate court will name a personal representative. Second, if the person named as executor in the will informs the court that he or she does not wish to serve as executor, the court will then appoint a personal representative.
A pour over will is a type of will. In it, the will states all assets of the estate move into a trust the deceased created during his or her life. Distributions are therefore made in accordance with the trust language.
In planning his or her estate for distribution after death, a person might choose not to make specific bequests in his or her will. Instead, the person might create a power of appointment. This power, given by the deceased (donor), gives the designated person (donee) the ability to select who receives assets in the decedent’s estate. If it is a general power of appointment, the donee can select anyone, including him or herself, as a recipient with no restrictions. The donor could also specify, though, a special power of appointment, which restricts the donee to distribute assets to a select group of people or organizations. The donor also can create a timeline in which the assets are to be distributed. For example, the donor might say the assets are to be distributed immediately or cannot be distributed until 10 years after the death.
It is important to note that assets subject to the power of appointment pass directly to the donee first and then must be distributed to the recipients chosen. This means a donee’s creditors can access them. It also means if the donee dies before the assets are distributed, the assets are considered a part of the donee’s estate. The power does not continue past the donee’s death.
A power of attorney gives a person the ability to act as an agent on behalf of the creator. The powers can be as broad or narrow as the power of attorney creation document state. Often, a person who holds the power of attorney for an individual during life might be named as executor in the will. The power of attorney expires at death or incapacity of the creator.
The term probate can be used in several ways; therefore it can have several different, but similar meanings.
To probate a will means to give the deceased’s will to a judge or court for the process of overseeing the final distribution of the estate in a way that complies with the laws of the jurisdiction and the will itself. The court can be involved in many aspects of the process of closing the estate, from determining if the will is valid and ensuring laws are followed to making sure the assets are properly distributed and closing the estate. In this case, the term probate would be used like the following example– “The executor probated the will of the deceased.”
Probate also can refer to the judge or court that is handling the estate in the previous example, such as, “The executor filed the will with probate.”
Finally, probate can describe the process, from start to finish, of settling a deceased person’s estate, as in, “The estate attorney advised me probate can take more than 12 months.” In this case, probate would refer to the process of making sure the will is valid, distributing property and assets, paying off any final bills, taxes, and other debts, and ultimately closing the estate if all has been completed properly and in accordance with the law.
Generally speaking, estates are made up of probate and nonprobate property and assets. The terms probate estate, probate property, and probate assets refer only to those items in the estate that can be distributed by a will. For example, you can give money or real estate through a will, but you cannot give money paid by your life insurance policy (because your life insurance policy already has named beneficiaries that you established when you set up the policy and could change throughout your life).