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Most Wills Don’t Work!

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Wow, that’s a scary statement, “Most wills don’t work!”  What does this statement mean?  Most wills don’t do what their creators think that they’ll do, so they don’t work.  This is for two main reasons:  availability of estate planning documents and how most assets are owned.  Is your will useless in distributing your assets?

First, if your estate planning documents aren’t available to your trusted helpers, it is as if they don’t exist.  The solution is to make sure that you trusted helpers know that you have done estate planning; where you keep your estate planning documents, including your will, and other important papers; and your estate planning attorney’s contact information.

Second, carefully analyze (with the assistance of your estate planning attorney) how your assets are owned.  Wills only control assets in your individual name or made payable to your estate upon your death.  For example, if your house is in your individual name, your will will control its distribution upon your death.  And, if your life insurance is payable to your estate upon your death, your will will control its distribution as well.

However, most property is not owned individually and most insurance policies are not made payable to the estate.  Consider property held:  jointly or by a revocable living trust as well as contract and payable on death property.

  • Jointly held property transfers, by operation of law, to the surviving joint owner upon death.  Most property owned by married couples is jointly owned.  The will has absolutely no affect on jointly owned property, regardless of what the will provides.

 

  • Revocable living trust property is distributed by the provisions in the trust itself; the will has no affect.

 

  • Contract property and payable on death (POD/TOD) is property with a beneficiary designation.  The contract states who receives the property upon death.  Life insurance, retirement accounts, stocks/bonds with beneficiary designations, and POD/TOD accounts are controlled by the contract, not by your will.

If you want your will provisions to instruct how your assets are distributed, consult with a qualified estate planning attorney.

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