How Your Estate Passes When You Die

The Chamberlain Law Firm

As a New Jersey estate planning attorney, I often receive questions about what happens to property when someone dies. It is important to understand the various ways your assets can be transferred, as this knowledge empowers you to make better decisions for your estate plan—as I often tell my clients, knowledge is power. In this article, I will provide a basic primer on the five main ways your estate can pass along after your death: revocable living trusts, wills & letters testamentary, intestate succession, contractual agreements, and asset transfers by law.

Revocable Living Trust

A revocable living trust is a popular method to avoid the probate process after passing away. By setting up a trust, the grantor (the person who sets it up) designates a trustee to handle the assets in the trust for the beneficiary’s benefit. Typically, the grantor is both the trustee and the beneficiary, and they have the power to revoke the trust at any point.

For example, a home can be transferred into the trust, which technically takes it out of the grantor’s name, thus avoiding the need for court intervention after they pass away. The trust document outlines the successor trustee and beneficiary, ensuring a smooth transition of assets.

Before you set up a revocable living trust, it is worth noting that establishing a trust can be costly. While these costs may vary depending on your individual circumstances, you should consider the costs of attorney’s fees, funding the trust, trustee compensation, and other ongoing trust administration expenses. An important factor to weigh when deciding whether to establish a trust is the complexity of the probate process in the state that you live in. In New Jersey, the probate process is relatively simple and not too costly. In New York, however, the probate process is more complicated and costs more, so a trust may be worth it.

Will and Letters Testamentary

A will is a legal document that outlines your wishes for the distribution of your assets and guardianship for your minor children after your death. Like revocable trusts, wills can be revoked or changed during the testator’s lifetime. If you have a will, your executor (sometimes called a personal representative in New Jersey) must submit it to the court to obtain letters testamentary. These letters grant the executor the authority to manage and distribute your assets according to the will’s instructions.

Note that, with a will, your estate must pass through probate. As discussed above, this can incur costs and a serious time-commitment on behalf of the executor. There are also some privacy considerations, since when your will goes through probate, it becomes a part of the public record.

Intestate Succession (Dying Without a Will)

If you die without a will, your assets go through probate, and your estate is considered “intestate.” In this case, the law determines how your assets will be distributed. An administrator is appointed by the court to manage the estate, and they must follow the legal guidelines for asset distribution. In New York and New Jersey, your assets will usually pass to your closest living relatives, such as spouses, children, or parents. However, if no close relatives are found, your assets may become property of the state. For this reason, we encourage everyone to have some sort of will in place.

Contractual Agreements (e.g., Life Insurance Policies and Payable-on-Death Accounts)

Payable-on-death accounts or life insurance policies are examples of contractual agreements that determine asset distribution upon death. These assets are not governed by a will or trust, and the contractual agreement takes precedence over such documents.

Payable-on-death (POD) accounts, also known as Totten trusts, are arrangements between a bank and an individual that designates beneficiaries to receive all of the individual’s assets. As the name suggests, the immediate transfer of assets is triggered by the death of the individual. Just about anybody with an account at a bank can convert it into a POD account by notifying the bank of who the beneficiary will be. POD accounts allow the beneficiary to automatically become the account holder and skip the probate process upon the death of the original account holder.

Life insurance is another option. Life insurance is a contractual agreement between an individual and a life insurance company, where the individual pays premiums and the insurance company agrees to pay the designated beneficiaries upon the policyholder’s death. After the policyholder dies, the beneficiary files a claim, and once the claim is approved, the insurance company pays out the policy’s death benefit. Depending on the terms of the policy, payment could be in the form of a lump sum, annuity payments, or a retained asset account maintained by the insurance company. Like POD accounts, life insurance policies usually do not need to go through probate.

Asset Transfers by Law (e.g., Joint Bank Accounts with Rights of Survivorship)

Joint ownership of property with rights of survivorship presents a seamless way for assets to pass to the surviving owner, bypassing probate. This type of ownership is frequently used in the context of real estate properties, vehicles, and notably, bank accounts. It is also used with real property.  For example, married couples often own their property jointly so when one joint owner passes away, the surviving co-owner automatically becomes the sole owner of the property.  This transfer is irrespective of the contents of the deceased owner’s will or estate plan. This transition happens instantly, allowing the surviving owner to maintain uninterrupted access and control over the jointly owned property.


In conclusion, it is crucial to know the various ways your estate can pass along at your death. As a New Jersey estate planning attorney, I encourage you to check your accounts, including IRAs, life insurance policies, and bank accounts, to ensure proper beneficiary designations. If you’re in New Jersey or New York and need assistance with your estate plan, please contact us at the Chamberlain Law Firm through our website or by calling us at (201) 273-9763 for a free consultation.

This article is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with a lawyer about the specifics of your case, contact The Chamberlain Law Firm at (201) 273-9763 to schedule a consultation.

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