There's no doubt that creating a will is smart estate planning, but not all property can or should be included in a last will and testament. How can you make sure you're including and excluding the “right” assets?
Read on for more information regarding what property you should not include in your last will.
What Not to Include When Making a Will
Property that shouldn’t be included in your will is any type that is already subject to laws regarding its distribution upon your death. The most common types of such property include the following:
- Property held with a right of survivorship: Community property with the right of survivorship and property held in joint tenancy or tenancy by the entirety will pass automatically to the co-owner upon your death, and nothing you write in your will can change that.
- Property held in a living trust: A living trust is specifically set up to facilitate the transfer of property upon the grantor’s death and to bypass probate. Accordingly, the beneficiaries of a living trust automatically receive any property held by the trust upon the grantor’s death. You can always change the terms of a revocable trust during your lifetime by amending the trust documents, but you cannot do so through a will.
- Life insurance or annuity proceeds: The beneficiary named on a life insurance or annuity policy automatically receives the proceeds.
- Proceeds from retirement plans, pensions, IRAs, and 401(k)s: As with life insurance proceeds, these pass directly to the beneficiary named on the forms.
- Pay-on-death bank accounts: Money in a pay-on-death bank account goes automatically to the beneficiary listed.
- Transfer-on-death (TOD) property: Stocks, bonds, real estate, or vehicles may be held in beneficiary this way, and they pass automatically to the named beneficiary.
What to Include in Will
You may be wondering, then, with all of the property listed above that shouldn’t be included in your will, what exactly should be included? The easy answer is everything else, but generally any real or personal property that will not pass automatically to a beneficiary upon your death should be listed in your last will and testament.
The best way to make sure you're not forgetting anything is to simply sit down and make a list of all of your assets as well as corresponding people you would like to receive them after your death.
Options for Making a Will
Now that you have an idea of what you should and shouldn’t include, it’s time to get moving on creating a will. Aside from hiring an estate planning attorney, you might also consider making a last will and testament online. Many websites provide services to help individuals write wills online, so this is another option as well.
No matter how you choose to draft your will, the most important thing is that you get started as soon as possible—this way you can give you and your family the peace of mind of knowing that your wishes will be followed after you’re gone.