Yes, those assets are subject to estate tax. By placing them in a revocable trust or a TOD account, you make them no longer subject to probate. So the assets can be transferred to the heirs without an order from the probate court. However, the assets can still be taxed. By the way, estate taxes are not an issue for most people. The federal government currently only charges estate taxes on estates with more than $5.34 million in assets. And most states do not have an estate tax.