Did you know that your Will does not cover every aspect of your Estate? Having a Last Will and Testament is an important part of the estate planning process, but there are several things your Will cannot do, some assets it will not control.
If you and your spouse own property as joint tenants with rights of survivorship, your Will cannot leave this property to anyone besides your spouse as long as he or she is alive as survivorship joint tenancy property automatically passes to the surviving spouse by operation of law. When the surviving spouse does pass away, it will be their Will that determines how the property is distributed because she is the sole owner of the property at that point. For this reason, you and your spouse may wish to discuss who your property should go to after you are both gone.
Your Will can also not affect any property that is held within a trust. Upon your death, the trust will determine how the asset should be distributed, and can do so whether your Will has been probated or not. And if your Will contradicts the designations of your Trust, the Trust will reign supreme because it “owns” the property.
This is also true with other legal documents where you have named a beneficiary. This includes life insurance policies, IRAs, 401Ks, annuities and Pension Plans. These assets transfer to the beneficiary you have designated. In order to change a beneficiary/recipient, you must update the corresponding document for each account or property. Making the change in your Will does not override the contents of the other document. Be sure to name a secondary beneficiary as failure to do so could result in a probate.
Unless it contains specific tax planning language, your Will also cannot change or lower the taxes on your Estate. There are ways to minimize taxes on your estate, but you’ll need to employ different estate planning tools for that to happen. A good estate planning attorney can help you choose the right strategies for you.
You should also leave your funeral arrangements out of your Will. If this is the only place you make your wishes known, there is a chance your requests may not be honored. Wills are often not read until after your funeral. Ask your attorney to create another document for your funeral plans.
Property that passes by your Will cannot help your family avoid the probate process after you’re gone. You can, however, make probate easier by updating your Will regularly to avoid any confusion.
Your Will also cannot leave conditional gifts. Sure, you may have seen a movie with an older gentleman stipulating that his son cannot inherit the estate until he has married, but in reality these conditions would be thrown out during estate probate.
If you have a loved one or even a pet that will need special care, create a Trust in their name. Many states now have Pet Trust statutes. Since your pet is considered property by law, it cannot inherit, so you must leave any funds for it’s care to the person you’ve designated to inherit your pet. But once the Will has been probated and those funds are distributed, there’s nothing to ensure that your pet actually receives the benefits of that inheritance. With a Trust you have much more control over the future care your pet receives.
Attorney at Law
- Five Things You Need to Know About Medicaid Planning - July 27, 2021
- Debunking Four Estate Planning Myths - July 22, 2021
- These Two Bills Would Broaden Taxes on Inheritances - July 20, 2021