18 Sep 2019
Many believe that having a Will is the only way to carry out their wishes as to who gets what. For some things, like a deed to your home which you own in your name alone, that’s true. You need a will or trust to name a beneficiary, in a legally binding way.
But for many other types of property, there are built-in instructions as to who will get it next. Consider the following examples:
• Trusts provide instructions as to where assets go when you die.
• With life insurance policies, you can name beneficiaries to inherit.
• With real estate or other jointly owned accounts, co-owners can inherit from a survivor, or not, depending on how the title is taken. If there is a right of survivorship, the survivor inherits it all. If co-owners own property as tenants-in-common, each owns 50%. The survivor doesn’t take all, so a Will is needed to name who inherits the other 50%.
• Transfer on Death or TOD accounts name a beneficiary to inherit upon the death of an owner.
• Qualified retirement benefits must pass via a joint and survivor annuity, to the surviving spouse. If a retiree wants another form of payment, like a lump sum, the spouse must okay the distribution.
• IRA accounts should name beneficiaries to maximize tax deferral.
If your accounts aren’t jointly owned, and/or you don’t name beneficiaries, you need a Will or a trust to make sure these assets end up in the right hands.