When it comes to estate planning, the primary document that comes to mind is a Will. The Will covers the basics for when someone passes away, but it does not cover everything.
As part of putting together a Will, a person will discuss with her attorney where she wants her assets to go when she passes away. The attorney puts provisions into the Will regarding the disposition of assets once she is gone. This seems simple, but often more is necessary. Some assets will transfer outside the scope of her Will.
If someone dies owning an asset solely in her name and without any beneficiary designations, the provision in her Will regarding that asset’s disposition on her death is controlling. However, if she dies owning an asset together with someone else as joint tenants, such as a home or vehicle, the jointly owned asset will go to the other surviving person regardless of whether her Will says otherwise. If she dies owning an asset that has beneficiary designations, such as a life insurance policy or a retirement account, the asset will belong to the individuals listed as beneficiaries regardless of what her Will says.
In the second two examples, which both transfer assets outside the scope of her Will, more planning is needed beyond just speaking with an attorney about her Will. If a jointly owned asset is held in a bank account or investment account, the person needs to confirm with the bank or broker exactly what happens to the assets held in that account on the first of the joint tenants to pass away. If the asset is life insurance policy proceeds or funds in a retirement account, the person needs to confirm with the insurance agent or account administrator who will receive the assets upon her death based on the beneficiary designations.
If changes need to be made to the joint account ownership or the beneficiary designations, these changes are made with the financial institution, broker, or agent. These changes are not made with the attorney. If the terms of her Will contradict the account ownership provisions or the beneficiary designations, the terms of the Will do not control; rather, the account ownership provisions and beneficiary designations control.
These examples are not an exhaustive list of situations where a Will is not enough. Situations, where assets may go to minor children or to an individual with special needs, are two other common scenarios where planning beyond a Will is often necessary.
In all cases, it is important to speak with an experienced estate planning attorney regarding what types of assets you own, who you intend to receive those assets upon your passing, and whether a Will is enough or if something more is needed.