When A Will Isn’t Enoughby Justin Dituri on 04/29/14
Sometimes when I’m at a social event, and the person I’m talking to discovers I’m an estate planning attorney, I get this question:
“When my grandma (or mom, father, uncle) died my sister (or brother, cousin, uncle) got all of this one thing, even though her will said everything was to be divided equally between me and my two sisters, how did that happen?”
This question uncovers a major confusion about the reasons why different types or property, or different types of accounts, are paid to loved ones, when someone dies.
Isn’t it enough to just have a will?
The answer is no; while it is a good idea to have a will, the instructions in a will do not necessarily control who gets things when you die. Think of your will as “instructions of last resort.” Let’s look at various ways that a person can say who gets things when they die.
1, Property owned with someone as joint tenants with rights of survivorship (sometimes known as JTWROS)
When there are joint owners on property or accounts, the surviving joint tenants get it when the other joint tenant dies. It does not matter what the deceased person’s will said.
2. Accounts with a named beneficiary
When the account owner dies, the named beneficiary gets the account. Examples of this are life insurance policies, annuity contracts, IRA’s, or accounts with a payable on death (POD) where someone is named. This also includes things where a living trust is named as owner; the trust will say who gets the property when the original trust owner dies.
3. Anything owned personally by the deceased person without a beneficiary designation
The instructions in the deceased person’s will determines who gets that property.
So, what was your answer to the person who asked the question about the sister getting all of one thing? I had to give the usual “lawyer answer to everything” – it depends!
“If your sister was a joint tenant with your grandmother on her bank account, then your sister would get the whole bank account when your grandmother died.”
“If your sister was the only named beneficiary on your grandmother’s annuity, or IRA, then your sister would get that when your grandmother died.”
The bottom line is that there are many reasons, and ways, that one family member “got the whole thing” when the will said “divide it three ways.”
What should I do?
If it is important to you to know who will get things when you die, and you are thinking about preparing a will, then you should also do a complete review of:.
· How you own things (joint tenant with another, or alone)
· If any of your financial accounts have beneficiary designations and everyone who is named beneficiary
Even if you have a will and are satisfied that it has the instructions you want, it is important to review it every so often to assure that your wishes are up to date.
Good estate planning is not a one-time event; it is important to understand that things change over time. What you own changes, your family’s relationships change, the legal world changes. It is a good idea to review and update your estate plan on a regular basis.
The information here is meant to be general and educational, to help you become aware of important issues. It is not meant to be individual legal advice for any person. If you have questions or issues, you should engage an attorney to address your unique concern.