So you have a will and have left everything to be split equally between your children. So what is everything? Your bank accounts? Your CDs? Your 401K? Your insurance policies? Some of these assets pass outside of the will after ones death. When thinking about estate planning, it’s important that you check with your banks, 401k administrators, and insurance companies to see if you have already designated someone to receive these assets upon your death.
For example, 30 years ago you set up your bank account. When filling out the paperwork you came to a section that asks if you want to designate a person to receive what’s in your account if you should die. You, single at the time, named your sister as the beneficiary. Your sister will receive the account upon your death regardless of what you put in the will. Another scenario occurs later on in life when you need someone to help you take care of your finances. Lets say a 75 year old woman adds her daughter to her account so that the daughter can help her with bills and other financial transactions. In the woman’s will, she asks that all of her money be split evenly between her 8 children. Who gets the money? Well if the daughter was added as a joint owner with rights of survivorship, the daughter will likely receive all of the money. That was not the woman’s intention. All she wanted was some help taking care of her finances.
Payable on death accounts, transfer on death designations, and joint bank accounts can be great estate planning tools that allow assets to pass without the need to probate a will. However, its important to get informed and be aware of how your assets are set up so that those who you currently intend to leave your assets to, would actually receive them.