A will is basically the cornerstone of any estate plan. This legal document stipulates how you wish to distribute your assets to your beneficiaries when you die. If you get every aspect of your will right, you will have peace of mind knowing that your hard-earned assets will go to the people and causes you care about when you are no longer around.
However, not every asset in your name belongs in your will. Knowing what you should include in your will (and what you shouldn’t) can help avoid conflicts and confusion that might arise down the road. Therefore, whether it is your first or fourth will, here are two assets you should not include in your will:
Jointly-owned assets
If you co-own property with someone else under a joint tenancy with a right of survivorship arrangement, such property will automatically pass down to the co-owner upon your passing.
For instance, if you and your spouse operate a joint bank account or stocks in a jointly operated brokerage account, then they will take over your share of the stock or joint account funds upon your death. Likewise, in a community property state like California, any property acquired during the marriage is deemed to be community property. You don’t need to include community property in your will since your spouse will be automatically entitled to it should you pass away.
Property with named beneficiaries
Certain assets like financial accounts are classified as transfer-on-death assets. Thus, they are automatically paid out to the named beneficiaries upon your death. As such, you don’t need to include such assets in your will. Assets with named beneficiaries include:
- Life insurance policies
- Bank accounts
- Pension plans and retirement accounts
- Investment and brokerage accounts
Making a will is one of the most prudent and worthwhile things you can do whilst alive and in sound health. Find out how you can draft a will that will stand the test of probate.