If you’re like most people, you may be startled to learn that your will won’t do what you think it should do. A will is effective for naming guardians for minor children, naming an executor, and directing assets titled in your individual name or payable to your estate.
A will may not control all property because of the way most property is owned. For example, consider Marv’s will. Marv’s will provides that all of his assets go to his children upon his death because he spouse, his second wife aka “evil stepmother,” has her own assets and her own children. What happens to the most commonly owned assets when Marv dies?
Typically, husband and wife own their house as joint tenants with right of survivorship. So, by operation of law, when Marv dies, the house goes to evil stepmother. Marv’s children have no rights to the house, regardless of what Marv’s will provides. This is not want Marv wants.
The investment accounts
Again, Marv and his spouse own the investment accounts jointly and the entirety of the account goes to the survivor, in this case, evil stepmother. Again, Marv’s children have no rights to the investment accounts, the spouse inherits.
The bank accounts
As with all jointly held assets, the survivor gets it all. In Marv’s case, his surviving spouse will inherit all bank accounts held in their joint names.
The life insurance
Life insurance is a contract and the contract (beneficiary designation) dictates who receives the proceeds upon Marv’s death. If Marv names his spouse, she will receive all of the proceeds upon Marv’s death even if his will provides otherwise.
Retirements accounts are also contracts and if the spouse is named as the beneficiary, the will has no effect on the assets. If his spouse is named as the beneficiary, Marv’s children receive none of the retirement assets. Under federal law, if Marv wants to name someone other than his spouse as beneficiary of his retirement plan, the spouse must sign in consent.
A will controls only those assets in your individual name or in the name of your estate. If Marv wants to give everything to his children upon his death, he must title his assets in a manner so that his children or his estate are his designated beneficiaries. Blended families mandate that careful, thoughtful and comprehensive planning be obtained to ensure that intentions are fulfilled and conflicts avoided. The best place to start is to consult with an experienced and qualified estate planning attorney.