Many people believe that the term “estate” only applies to the wealthy. However, in reality, almost everyone has an “estate.” Your estate is all of your property – your home, real estate, savings, bank accounts, life insurance policies, furniture, retirement plans, personal property and everything else you own. In other words, if you own property, you have an estate.
Your entire estate is made up of your probate estate and your non-probate estate. If you die with a will, you have died testate. If you die without a will, you have died intestate.
In South Dakota, probate is the process of proving a will’s validity before the state circuit court. Probate is done so that your assets can be properly administered and distributed. You should keep in mind that even if you die intestate (without a will), your assets still need to be administered and distributed through probate.
The assets that go through probate make up your probate estate. These are usually assets that are titled solely in your name and come under the control of your personal representative (formerly known as an executor). For instance, real estate, stocks and bonds, bank accounts, and vehicles are part of your probate estate if they are titled only in your name.
On the other hand, when you die, some of the assets that you own may be distributed to others without regard to your will and outside of the probate process. These assets pass directly by operation of law or by contract and make up your non-probate estate. For example, an asset that you own jointly with another person (such as real estate or a bank account) may pass directly to the surviving joint owner upon your death by special legal rules.
Other types of non-probate assets, such as life insurance or retirement accounts, allow you to designate a beneficiary. These assets will then be distributed to your beneficiary when you die. In other words, some of your assets may not be controlled by your will or the probate process.