Sound estate planning may help you pass your estate to your children or anyone you want to inherit from you following your death. A last will and testament is an excellent place to start your estate plans. However, a will might not cover everything you own. A court may rule that you cannot dictate what happens with certain property with your will. But, what are some things not covered by a will?
The kinds of property you cannot address with a will generally avoid probate or have assigned beneficiaries. Here is a look at some common examples.
Accounts with Named Beneficiaries
There are multiple accounts and plans for which you can name a beneficiary. Common examples include your life insurance policy, your retirement plan like a 401(k) or an IRA, or your stocks and bonds if held in the beneficiary. You may also have a bank account that will payout to a beneficiary upon your death.
Some people try to use their wills to change the beneficiaries on these accounts. However, a judge is unlikely to recognize what your will says and will stick to the designations on the accounts. You must change the beneficiary named on your accounts to make your changes legally valid.
Jointly Owned Property
A will also cannot dictate what happens to a property you own with someone else. For example, if you own property in joint tenancy, there will be a right of survivorship that passes your ownership share to the surviving owner.
A typical example is if you own a house with a spouse. When you die, the right of survivorship will give your spouse your share of the house and make your spouse the sole owner.
Your will is also not an appropriate document to dictate your funeral wishes. A family will often conduct a funeral before the reading of the will, so your children might not discover what you intend for your funeral until after they bury you. Instead, consider writing down your funeral requirements in a separate document. You may also discuss your funeral plans in advance with your family and give them copies of your funeral document.
These examples show that it is important to know your options regarding your estate. A beneficiary designation or joint tenancy may even allow you to avoid probate in certain cases, which can help speed the rest of your estate through probate.
Our New York estate planning lawyers can help.