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Limitations of a Will
You may think your last will and testament is the final say on how your assets will be distributed upon your death, but that may not necessarily be the case. That document may be superseded by other paperwork or relevant laws. There are alternative ways to transfer assets that can preempt the language in a will. For example: • Retirement accounts – The individual who is listed as a beneficiary of your IRA, 401(k), 403(b), pension plan, etc. will likely end up receiving those assets regardless of what is stated in your will. What if no primary beneficiaries are still alive and no contingent beneficiaries were named? Then, the default terms that were established when the account was first opened would determine the recipient(s). • Life insurance policies – Very similar to retirement accounts, whoever is listed as a beneficiary most likely will receive the death benefit. • Bank accounts – If an account is a TOD (transfer on death), POD (payable on death), or JTWROS (joint tenancy with right of survivorship) account, the balance of the account is automatically transferred to the named beneficiary(ies) or survivor upon your death. • Real estate – If the property is held jointly with rights of survivorship, the property will automatically pass to the surviving co-tenant upon your death. • Trusts – Any asset contained within a trust is not governed by a will. Once a Trust is set up, however, you would need to retitle the account or asset ownership and establish beneficiaries. We caution that certain state or federal laws could be in place that would revoke some of these findings, so it would be prudent for your estate attorney to research your various state and federal regulations before completing your will and ensuring beneficiaries are appropriately named on the above-listed assets. In addition, remember that you may need to make updates over time for significant life events (divorce, birth or death of a family member, etc.); therefore, it is important to regularly review your will and named beneficiaries to ensure they accurately reflect your wishes.
–Malcolm Forbes
