You’ve done the important and hard work of deciding how you want your assets to pass at death and preparing a Last Will and Testament that reflects this plan. But, your work shouldn’t stop there.
Two common misconceptions are that you can avoid probate if you have a Will and that all of your assets will pass according to the terms of your Will. However, estate planning is truly a three-part process. My colleague Will McCarthy often describes it as harvest combine: at your death, all of your assets are pooled together and run through a process, much like grain at harvest, as follows:
1. Jointly titled assets pass through first to the surviving joint owner
2. Assets with a transfer on death, or beneficiary, designation then pass through to the named beneficiary
3. Anything else titled in your name passes to the persons designated in your Will, often via probate.
Along with preparing your Last Will, you will want to review your records to confirm how your assets are titled and determine who you’ve named as a beneficiary on any transfer on death designations. This applies to real property, bank and investment accounts, retirement accounts, life insurance, and business interests. You’ll have to do much of the initial leg work to identify how your assets are titled, and whether you have completed transfer on death designations to name beneficiaries.
Armed with this information, you can then work with your attorney to update titles and beneficiary designations so these assets pass in a manner that is consistent with your overall estate plan. Unfortunately, the manner in which you title assets and designate beneficiaries varies depending on the asset and institution. Your attorney can assist with updating the title to your real property, and recording a transfer on death deed if appropriate. However, for any financial accounts, you’ll once again have to do the follow-up leg work to contact each institution to change any titles and beneficiaries. Your attorney can give you sample beneficiary language to use to ensure you accurately complete any transfer on death designation forms.
For any assets remaining titled in your name at your death, without a named beneficiary, the personal representative (or executor) you name in your Last Will and Testament will determine whether a probate is necessary to transfer those assets, or whether there is another mechanism by which they can transfer. A Will doesn’t avoid probate, but instead provides direction to your personal representative, and the Court, as to how you want your assets to be distributed through probate.