Where Will My Assets Go?

Mike Mallak By | On April 16, 2015

What will happen with my assets when I pass away?  This is a simple enough question but has become increasingly difficult to answer. Some may assume that “all my assets will go to my spouse” but this is not always the case. A careful review of beneficiaries, titling, legal documents and the probate process can give you a better idea of how your assets will pass on to your heirs.

Many accounts that hold monetary assets have a designated beneficiary.  These types of accounts would include IRAs, 401(k)s, life insurance, and annuities. Designations such as “transfer-on-death” or “payable-on-death” can also be added to investment or bank accounts.  It’s important to remember that any account with a beneficiary will pass on to the beneficiary listed in almost all cases.  This means that if a beneficiary is out of date or incorrect, there is little recourse.  A will or other legal document will not have any effect on how the assets are passed on unless the beneficiary designation dictates so.

Many real assets such as homes, land, and vehicles may be transferred by titling.  For these assets titling such as Joint with Rights of Survivorship (JTWROS), Tenants in Common, or Trust ownership can direct who will hold ownership once an owner of the these assets passes away.  New titling options like Transfer on Death Deed can allow easier transfer of property at death as this allows a single owner to assign the property at death to a beneficiary named on the deed, skipping the probate process.

Any remaining assets including personal possessions, those assets without title or without direction from titling, and accounts without a beneficiary, will go through the probate process to determine their final direction. Probate is the state-adopted method of transferring ownership of assets to heirs.  This process can be facilitated by a will and is one of the many reasons that having a valid will is so important. Without a will, assets are directed by state intestacy statutes which may pass assets to unexpected or undesired heirs.

Estate planning is a key component to a complete financial plan and should be addressed before it’s too late.  Many times an attorney is needed to draft legal documents or provide further.  Ensuring your assets will pass to the heirs you wish, in the manner desired, is too important to ignore. If we can assist in any way, please let us know. Our team of advisers are always happy to aid our clients in the estate planning process.