Creating a will is a good way to direct how your assets are distributed. This can be very helpful with financial assets and family heirlooms. It demonstrates how you want your assets to be passed to specific beneficiaries, helping ensure that your wishes are followed and reducing the odds of conflict between those beneficiaries.
Not all assets, however are always going to be distributed in accordance with your will. In certain situations, your will may be disregarded. That’s why you may need to take other steps to make sure that your estate plan works effectively. Let’s take a look at two examples.
Assets with the right of survivorship
In some cases, a surviving spouse will have a right of survivorship, meaning that they automatically inherit a certain asset. This may be true even if it goes against what the will states.
An example could be a family home. A will may say that the home should pass to the adult children, but a spouse who has a right of survivorship to that real estate may get to keep the home themselves.
Life insurance payouts
It is also important to consider life insurance policies, which require a beneficiary designation. When someone purchases a life insurance policy, they need to choose a beneficiary.
Generally speaking, if there is a conflict between this beneficiary designation and the will, the life insurance company will just pay the beneficiary that is listed on the documentation. They are not interested in what the estate plan says, so the beneficiary designation takes precedence.
Addressing complex assets
Ensuring that your estate plan reflects the beneficiary designations you’ve made elsewhere can help prevent confusion and disputes after you’re gone. It’s also crucial to recognize the cases in which something other than your estate plan documents will take precedence. Having experienced legal guidance will help you take the necessary steps to distribute them appropriately.