By Anthony S. Rachuba,
Esq. Rachuba Law Offices, P.C.
While a Will disposes of assets a person owns in his/her sole name, it comes as a surprise to most people that most assets they own will not pass via their Will.
To better understand what assets pass according to a Will, it helps to identify he assets that do not pass pursuant to a Will. The assets that do not pass via a Will include assets held jointly with another person and assets which contain a beneficiary designation. For example, assets such as a 401(k) plan account, an IRA and a life insurance policy all include a beneficiary designation form. A beneficiary designation form is typically completed when the retirement account is established or the life insurance policy is purchased. It provides to whom the account or policy proceeds should be paid upon the owner's death. The only time a Will does provide to whom such assets shall pass is when there is no beneficiary designation form on file or the persons named on the beneficiary designation form are all deceased.
Another example of an asset which does not pass according to a will is an asset which is jointly held with another person(s). Assets held jointly with another person typically pass to the surviving joint owner(s) upon the death of an owner. This transfer happens automatically and does not require any action on the part of the surviving owner(s). The only time the share of a deceased joint owner passes according to a Will is when the asset is held by more than one person as “tenants in common” and not "with rights of survivorship".
When engaging in estate planning, it is important to consider all assets and understand how and to whom such assets will pass at death. It is important to understand that a Will does not control the disposition of all assets at death and certain assets will pass according to a beneficiary designation form or automatically by right of survivorship.