Which asset has a cash value inside it and is payable to a beneficiary, often not included in probate?

• A. The life insurance policy
• B. The house in joint tenancy
• C. The car in decedent's name
• D. The CD in decedent's name

Answer: (A)

Assets that pass directly to a named beneficiary outside the probate process are designed to avoid probate. A life insurance policy fits this pattern because it can have a cash value as part of the policy, and most importantly, it designates who should receive the death benefit when the insured dies. That death benefit is paid to the beneficiary directly and typically isn’t included in the deceased person’s probate estate, which is why this type of asset often isn’t probated.

Compare with the other items: a house held in joint tenancy with right of survivorship will pass to the other owner without going through probate, but it doesn’t involve a cash value that’s payable to a beneficiary. A car titled in the decedent’s name usually becomes part of probate unless there’s another transfer arrangement, and it doesn’t inherently provide a cash-value payout to a beneficiary. A CD in the decedent’s name is a bank asset that would go through probate unless it has a beneficiary designation or payable-on-death arrangement.

So, the asset with a cash value and a beneficiary payout that’s often not included in probate is the life insurance policy.