Q: I recently signed a last will and testament but it does not list out my assets individually, is that alright? What about my retirement accounts and annuities?
A: A last will and testament is a document that states to whom your assets will be distributed upon your death. However, any asset that has a named beneficiary or a joint owner will go to that designated person, not to the persons listed in your last will and testament. When you are meeting with your estate planning attorney, it is essential to the process that they ask you what each of your assets are, if they are titled in your sole name or with a joint owner, and if you have named a beneficiary on the asset.
In some instances, an individual may want to list who will receive certain items personal property, such as a piece of jewelry, or certain real estate. While we will have clients list these items individually, we do not counsel clients to list out each individual account in their last will and testament. For one thing, there is no guarantee that the accounts that exist at the time of signing the documents will still be in existence at the time of your death. Or if the account is still in existence, the value of it will likely change so it may no longer follow your wishes of the division of your property. We also want to make sure that accounts that you open after signing your will are properly disposed of at your death and there is no conflict between a designation with the bank and your estate planning documents.
Many times a client will want assets to go equally to certain persons and not realize that, with the beneficiaries designated the way they have done, this goal will not be achieved. For example, if my will says both my children should share equally in my estate, but for convenience I have named my daughter as joint on my savings account, then my son will not share in that account at my death.
Retirement accounts including an IRA, 403(b), 401k, etc., often have a designated beneficiary. When the account is originally created, the plan representative or financial advisor usually prompts the owner to name the person to receive the funds at the plan owner’s death. If you name “Person A” as the designated beneficiary of one of these accounts and your last will and testament names “Person B” to receive the account, “Person A” will get the money. The individual designated with the bank will take precedence over the person named in the last will and testament.
If you have already signed a last will and testament, did your lawyer review these questions with you? Did they ask you to list your assets and ask if you named a beneficiary on any of them? If not, you should sit down with an attorney and have these conversations. A proper estate plan often includes a mixture of proper asset titling, beneficiary designations, and estate planning documents.
- Nancy Burner, Esq. and Britt Burner, Esq.