Many people assume a will controls everything they own. In reality, certain assets pass outside of it entirely. Recognizing these distinctions is an important part of understanding how your overall plan functions.
Assets beyond your will’s authority
Here are common examples of assets this document does not govern:
- Jointly owned property: If you own real estate, bank accounts or other assets with another person as joint tenants with right of survivorship, the remaining owner automatically receives the interest. For instance, a joint savings account in New York passes directly to the co-owner.
- Beneficiary designations: Life insurance policies, 401(k)s, IRAs and annuities name specific beneficiaries. These funds go directly to those individuals, regardless of what the will states. For example, if your life insurance names your sibling as the beneficiary, that payout goes to them, even if your estate plan leaves everything to your spouse.
- Trust property: The distribution of assets you transfer into a living trust will be according to the terms of the trust, not your will.
Overlooking these details can lead to assets passing to someone you did not intend.
Why this distinction matters
Knowing what a will controls, and what it does not, allows you to create a more coordinated estate plan. To help keep your instructions consistent, you may want to:
- Review your beneficiaries after major life events, such as marriage, the birth of a child or divorce
- Confirm how your bank accounts and real estate are titled
- Revisit your estate plan at regular intervals to ensure all parts still work together
Taking these steps helps carry out your instructions across all account types. You will likely get the most out of a carefully prepared will when you consider it alongside the other arrangements that govern how your assets pass.