Also known as: nonprobate transfers · non-probate transfer · non-probate transfers
Written by attorneys · grounded in primary & secondary sources — see below
A transfer of property or contract rights that takes effect at the donor's death without requiring probate administration. The arrangement is established during the donor's life and shifts possession or enjoyment directly to the donee upon death while the donor retains substantial lifetime control such as the power to revoke or alter the beneficiary.
Nancy Nelson dies survived by her husband Noah Nakamura. At her death Nancy owned a funded revocable trust that would pass the remainder to her parents and a life insurance policy naming her cousin as beneficiary. When Noah's personal representative calculates the augmented estate for Nancy's elective share, the trust remainder is included as Nancy's nonprobate transfer to others but the insurance proceeds are excluded from the valuation.
Naveen Nanda's estate administrator learns that a MetLife policy paid $25,000 directly to beneficiary Nadia Novak after Naveen's death. The administrator asserts that the proceeds belong to the estate because no trust was created, but the court determines that the payment constitutes a completed nonprobate transfer that passed outside probate to Nadia.
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The calculation treats the surviving spouse as if she had been the decedent and includes the value of her hypothetical nonprobate transfers to others. Revocable trust remainders payable to third parties are included. Life insurance proceeds payable to a third party are carved out and not valued as if the spouse had died.
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Yes. Life insurance benefits paid directly to a named beneficiary constitute a nonprobate transfer that occurs outside probate administration. The proceeds pass by contract rather than by will or intestacy.
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A transferee of a nonprobate transfer is subject to liability to the probate estate for allowed claims and statutory allowances to the extent the estate is insufficient. Liability is limited to the value of the nonprobate transfers received or controlled by that transferee.
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…The court further concluded, “[Tyson Hall’s elective] share cannot be satisfied without including the value of the decedent’s non-probate transfers to others pursuant to N.D.C.C. § 35.1-05-02. As a result, [Tyson Hall] is entitled to the homestead in its entirety including any share of the joint tenant, Brianna McLaen . . . .” [¶19]…