For many people, estate planning begins and ends with drafting a will. The will they sign is the only document providing guidance regarding the distribution of their property and the support of their dependent family members after their passing.
In some cases, especially when people create wills without professional legal support, they may include assets that do not belong in a will. Addressing the types of assets below in a will can trigger probate confusion and questions about the validity of an estate plan.
1. Life insurance proceeds
When people obtain life insurance, they name a beneficiary in official insurance company paperwork. The beneficiary of the policy receives the payout in the event of the policyholder’s death. A will cannot alter the beneficiary of a life insurance policy.
2. Jointly held assets
An estate generally consists of property owned solely by the person who died. Assets that they own jointly are likely not part of their estate because another person has a partial ownership interest in those resources. Adding jointly held assets to a will can lead to disputes about the allocation of ownership after one owner’s passing.
3. Accounts with beneficiary designations
Financial institutions often allow account holders to name the beneficiary to assume ownership of checking, savings or investment accounts, including retirement savings accounts, when the current account holder dies. The beneficiary paperwork filed with the financial institution allows for the transfer of those accounts outside of the probate process.
Those hoping to leave a meaningful legacy when they pass may need to review their wills and an inventory of their assets with an estate planning lawyer to ensure they have appropriate documents in place to limit the risk of probate conflict. And that’s okay.