Three Streams, One River

Myth: Your Last Will & Testament governs everything.

Truth: Only assets in your own name, with nowhere to go when you die, follow your Will. These are probate assets. Examples can include bank accounts, real estate, investments, sole proprietor businesses, and personal property you can pick up and carry away such as cars, boats, airplanes, artwork. Your Will is only “one stream” of assets, known as probate assets.

Myth: When you die, your Last Will & Testament overrules beneficiary designations on your life insurance, retirement accounts, annuities, and interests in business or trusts.

Truth: These types of assets follow the contract directing the asset. This is typically a beneficiary designation you elected when you opened the account, bought the asset, updated the beneficiary designation. If you created a trust, you have a contract with the Trustee instructing who inherits it, and how they inherit it. If you have a business agreement, that contract (typically) instructs how your interest is inherited upon your death. The beneficiary designation, POD (payable on death)/TOD (transfer on death), trust document or business agreement are known as contract assets and they are not overruled by your Will (unless you specify language in the contract to deliver the asset to your probate estate; in some instances, a blank designation will force it to your probate estate).

Myth: Your bank or investment account you added your child to so they can assist you with paying bills and managing the investment is still governed by your Will when you die.

Truth: If you add a child, or anyone else, to your financial account, you have created a joint account that will pay to the child upon your death. These are known as assets that pass by operation of law. When an owner dies, typically the ownership of the asset passes to the survivor “by operation of law”. Examples are bank accounts, deeds to property, automobiles, or any other asset where more than one person owns it. There are exceptions to the survivor rights, especially with real property, but only a knowledgeable attorney can guide you with your particular circumstance.

Edwards Estate & Elder Law can help you understand and adjust your PROBATE, CONTRACT AND OPERATION OF LAW assets so the “3 Streams”flow into “1 River” in accordance with your wishes for inheritance. We can help Executors and Trustees navigate the probate and administration process to deal with debts and deliver inheritances.