A Last Will and Testament is a legal document that allows you to control what happens to your estate (money, property, and personal items) after your death.
Creating a Will is an important step in ensuring that your final wishes are carried out and can help to avoid any conflict or confusion among loved ones after you’re gone. What happens if I die without a Will in Tennessee?
Most assets can be devised through a Will. However, there are some assets, or types of accounts, that should not be included in your Will.
5 things that you should not include in your Will as part of your Estate Plan
1) Joint tenancy property
If you own property with someone else as joint tenants, this means that upon your death, the other person will automatically inherit your share of the property, regardless of what your Will specifies.
If you’re considering selling the property or changing the ownership arrangement, you should consult with an attorney to ensure that doing so won’t inadvertently create a joint tenancy.
In general, joint tenancy property should not be included in your Will since it will pass to the other owner automatically upon your death. This can simplify things for your loved ones after you’re gone and help avoid any potential disputes.
2) Life Insurance proceeds
If you have a life insurance policy with a beneficiary, the death benefit will be paid directly to the beneficiary, regardless of what is stated in your Will.
Including life insurance proceeds in your Will can cause problems. For example, if you name multiple beneficiaries on your life insurance policy, but only include one of them in your will, the other beneficiaries may not receive their share of the death benefit.
To avoid any confusion or problems with distributing life insurance proceeds, it is best to keep them separate from your Will, and keep your beneficiary designations up to date.
3) Retirement plan proceeds
These proceeds are paid to a named beneficiary much like insurance proceeds. They will be distributed according to the designation on the account, not according to your Will. So if you want your retirement plan proceeds to go to someone specific, make they are named on the account.
If you don’t name a beneficiary, or if the beneficiary you name dies before you do, then the retirement plan proceeds will be distributed according to the rules of the account. For example, with a 401(k), the proceeds would go to your spouse or domestic partner if you have one, or otherwise to your estate.
4) Payable-on-Death (POD) accounts
If you have a payable-on-death (POD) account, there’s no need to include it in your will. The account beneficiary designation supersedes your will.
A POD account is an easy way to leave money to a loved one outside of probate. When you die, the money in the account goes directly to the named beneficiary.
Examples of payable-on-death (POD) accounts are:
- Bank accounts, such as checking and savings accounts
- Certificates of deposit (CDs)
- Money market accounts
Designating a beneficiary for your POD account is simple and straightforward. You should periodically review your beneficiary designations to ensure that they are still up to date.
5) Personal property and family heirlooms
Your Will is not the place to list out every single item you own and who should get it. This means things like jewelry, clothing, art, and other sentimental items should be left out.
There are a few reasons for this. First, it can be difficult to determine the value of these items. Second, they can be hard to divide up among heirs. And third, they can be a source of conflict among family members, especially if specific items that were promised have been lost or misplaced over the years.
If you have personal effects that you want to leave to specific people, it’s best to use a separate document called a Personal Property Memorandum. That way, there’s no confusion or disagreement down the road.
A properly created Last Will and Testament ensures a smoother future for you and your loved ones
When creating your Will, avoid being too specific in your will about how you want your assets divided up. While it’s fine to express your general wishes, going into too much detail can create problems down the road if circumstances change.
Creating a will may seem like a daunting task, but it doesn’t have to be.
Contact us today and we can walk you through all of the steps to ensure that your will is valid and easy for your loved ones to access.