We all remember the movie where grandpa has died and the entire family is gathered for a reading of the will at the attorney’s office. Usually there is a fireplace nearby and you get the feeling that it is otherwise pretty cold in the room. Finally the attorney pulls the Will out of a folder and slowly reads its provisions, announcing who is to receive a share of the estate…. and sometimes…. who is not. “I hereby bequeath all of my real and personal property to my children in equal shares”.. is often how it goes, and we assume that the three kids got it all equally and that everything grandpa owned, went to them. That’s what the Will said so it must be so. Not exactly.
You see a Will is not as powerful as you might believe. Turns out that when grandpa first got married to grandma, he took out a large life insurance policy and named her the primary beneficiary. Then when the first of their three children was born, grandpa named the first child as a contingent beneficiary on the same policy. Twenty years later after the birth of their third child, grandma died. Now grandpa has died without changing the beneficiary designations on his life insurance policy and the firstborn daughter gets the entire death benefit from the policy AND 1/3 of the estate from the Will. Not what grandpa intended.
Wills are not the ultimate guide on who inherits your stuff at your death. How your assets are titled determines where they will go, regardless of what the Will provides. For instance, if you are a joint owner on a bank account or on the deed to your home, that asset will automatically pass to the other owner at your death, even if your Will directs otherwise. The same thing happens with property held in a trust, or with retirement accounts, investment accounts, life insurance, annuities and other assets that permit you to name a beneficiary who will receive those things at your death. The transfer on death designation trumps the Will.
Having and maintaining a comprehensive plan prepared by an attorney who specializes in estate planning is essential to ensure that the things you own end up in the hands of the people you love. Make sure you consult a professional who will conduct an overall estate plan review to ensure that your wishes and objectives are effectively carried out in your estate plan.