Last Wills and Testaments pass property to heirs after the death of the Testators, the people who signed them. However, there are other ways to pass property outside of Last Wills and Testaments, such as jointly-titled property, payable on death accounts and beneficiary designations. It is a good idea to review your assets with an elder law attorney to determine which property is controlled by your Last Will and Testament and which property passes in other ways.
Last Wills and Testaments control assets in the sole name of the Testators after the Testators pass away but not other types of assets. First, there is joint ownership of property, so that a jointly-titled bank account is viewed as owned by the surviving joint owner after the death of the first joint owner. This type of bank account may be able to be fully accessed by either party during their lives.
Second, there are “Totten trust” bank accounts, which are usually bank accounts titled in the owner’s name “in trust for” someone else. An “in trust for” bank account passes to the named individual after the owner’s death, but the owner has full use of the funds during his or her life. Similar to Totten Trusts are “Payable on Death (POD)” or “Transfer on Death (TOD)” Accounts, which name someone to whom an account passes on the death of the owner. POD or TOD may be used for savings bonds or investment accounts. The owner has full use of the funds during his or her life.
Finally, there are assets that have beneficiary designations, which name someone as a beneficiary after the owner’s death, such as life insurance policies, annuities or retirement accounts. It is recommended to name a primary beneficiary and a contingent beneficiary.
It is important to plan ahead for the distribution of assets after death to ensure that your wishes are carried out. For example, if your Last Will and Testament leaves everything to your daughter, but your son is joint owner of all of your bank accounts and the named beneficiary on all of your retirement accounts, your daughter will not inherit any of the bank or retirement accounts. This is why an asset review by an elder law attorney can help to make sure that your estate plan accurately reflects your wishes.