When a person in Sacramento takes steps to shore up his or her estate by preparing a will, it might seem like a relatively straightforward process. However, many are not fully aware of what the terms of a will entail especially when it comes to what is covered by it. Having an understanding of what the will covers in terms of property can help to move forward appropriately and account for all the issues that could eventually present a problem between relatives at the time of the person’s death.
A will does not cover everything the testator owns. It will only affect things that are in the person’s name when he or she dies and if there is not a beneficiary who has been named. The following assets will not be affected by a will: life insurance; retirement plans; assets that are jointly owned if there is a right to survivorship; things that are designated as “transfer on death”; community property with a right to survivorship; living trusts; and the spouse or domestic partner’s portion of community property.
If there is a cash payout from life insurance, it will be paid to the beneficiary that is stated in that document regardless of what the will says about other items. If the testator has a retirement plan like an IRA, that will be transferred to the named beneficiary. If there are assets that are owned jointly such as a car, real estate, bank accounts and stocks, they will pass to the joint tenant. Brokerage accounts and certain securities might have a beneficiary who will receive the assets. If there is a notation that says “transfer on death,” it will go to that person. A married couple that has community property will see the property go to the surviving spouse. With a living trust, the assets will be distributed as per the instructions and have nothing to do with what the will says.
Given the confusion that can emanate from terms of the will and what can and cannot be distributed according to its contents and the law, it is imperative that a person taking out a will be sure that properties from estates will go where they want them to go. This make it wise to know how to draft a will as well as preplan with the above-listed assets to be certain they are given to those who the testator wants to have them. An attorney can be of great assistance toward this end.
Source: calbar.ca.gov, “Do I Need A Will? — 2. Does a will cover everything I own?,” accessed on April 19, 2016