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Probate Property

When is property considered probate or non-probate? Well, as I’ve said in the past properly funded Revocable Living Trusts, and certain other types of trusts, bypass probate in Missouri (unless their validity is challenged). Moreover, co-titling of property — payable on death arrangements, joint tenancies — have the effect of passing to the other named individual upon death.

In Missouri, RSMo, 474.250, addresses specific types of tangible property which are also exempt from the probate process:

The Family bible and other books, one automobile or other passenger motor vehicle, including a pickup truck, with its means of propulsion, all wearing apparel of the family, all household electrical appliances, all household musical and other amusement instruments and all household and kitchen furniture, appliances, utensils and implements.

While most of these statutory exemptions are clear, what is not immediately clear on the face of the statute is what constitutes a “household” item. Missouri case law has had to explain this ambiguity, and a household item is property related to the continued operation and function within the structure of the house itself. Those items with an inherently outdoor function cannot, then, be couched as a “household” item, and thus are included in a probate estate.

This isn’t the end of the inquiry. Under RSMo, 474.250, only a surviving spouse or unmarried minor children of a decedent are entitled to this exempt property. Subsequently, if an individual dies without a surviving spouse or unmarried minor children, then these exemptions cannot be utilized.

What’s the effect of whether property is exempt under this statute or not? If the property is not exempt, then it is applied to the decedent’s probate estate and may be used to pay any creditors and, when applicable, be distributed to descendants according to RSMo 474.010 (Intestacy). If, on the other hand, the property is exempt, then it is not liable for the payment of any creditor claims against the estate (with a major exception being that such exempted property must be turned over to a creditor if the decedent designated it as collateral/security for a loan).

Complicated, I know.

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