Wills are the most basic form of estate planning. However, if you are getting ready to prepare a will, you should know that there are some properties that do not pass on via wills. This means that there is no benefit to including them in your will since the will does not control what happens to these properties.
These assets cannot be conveyed to others by using a will. Properties that are not passed on via wills do not go through probate; rather, they automatically pass on to the chosen beneficiaries through a different legal process, which depends on the type of asset. If you attempt to include these types of properties in your will, the court is required to ignore them.
California Estate Planning Attorneys
If you are getting ready to draft a will and prepare your estate plans, the attorneys at Galanti and Copenhaver can help. Our attorneys have many years of experience handling all aspects of estate planning, from start to finish. Contact our office today to schedule a consultation to meet with one of our attorneys and learn more about how to get started with your estate plans.
Properties That You Place in a Trust
Any property that you place in a trust will be distributed according to the terms of the trust. Even if you try to include it in your will, the terms of the trust will dictate the distribution of that property. This rule also applies
Property in Which There is a Right of Survivorship
Some property, such as real estate, carries with it a right of survivorship under certain circumstances. For example, if you own property that is held in tenancy by the entirety, joint tenancy, or community property with the right of survivorship, then your share of the property is automatically transferred to the surviving co-owner after you die. Even if you tried to include your share of the property in your will, there would be no effect.
Certain Property That Already Has a Named Beneficiary
Keep in mind that there are actually many different ways that you can pass on a property without using a trust or a will. For some types of property, you likely will have already chosen a beneficiary. You do not need to double-up on this concept by also adding this property to your will.
1. Property Held in Transfer-On-Death Form
Property that is held in a transfer-on-death form, such as stocks, bonds, and some other assets, will not need to be included in your will. If you want to change the beneficiary that you have designated in the past, you will need to make a new beneficiary deed, title document, or form. Simply including the asset in your will cannot make that change for you.
2. Money in a Pay-On-Death Bank Account
If you have money located in a bank account that is pay-on-death, it cannot be transferred via a will. You will need to contact your financial institution in order to change the beneficiary.
3. Money in a Pension or Other Type of Retirement Plan
Money that you have in a pension plan, 401(k) plan, individual retirement account (IRA), or any other type of retirement account cannot be transferred via a will. Around the time that this account originated, you should have chosen a beneficiary to inherit the asset upon your death by naming them on forms that were provided to you by the account administrator. To change the beneficiary, you will need to contact the account administrator.
4. Proceeds of an Annuity or Life Insurance Policy for Which You Have Named a Beneficiary
If you have previously designated a beneficiary for your life insurance or annuity policy, you will need to contact your insurance company directly in order to make any changes. This cannot be done by listing this asset in your will, since it does not pass on through a will.
5. Inter Vivos Gifts
Inter Vivos is a Latin term that describes gifts that you make to others during your lifetime. A will is not required to ensure the transfer of these gifts.
Understanding What Should and Should Not Be in Your Will
Before you get started drafting a will, it is essential to know what you can and cannot include in your will. By following these rules, you will make it easier on the court and your beneficiaries when it comes time to prove your will in court and make the distributions to your beneficiaries in accordance with your will and other estate plans.