Many of your assets get distributed with your will. If you want to leave tangible assets like a car or a home to your adult children, you can name them in your will as beneficiaries. You will also need to address financial assets, family heirlooms and items with sentimental value, and much more.
But while the will is the basis of your estate plan, it is important to remember that not all assets are going to be distributed in this manner. There may be additional steps that you need to take. Let’s look at two examples.
A payable-on-death account
First and foremost, you can select a beneficiary for a bank account, making it a payable-on-death account. When you pass away, the beneficiary is then the owner of that account. This means it does not have to go through probate because it immediately exits your estate as soon as you die. Your named beneficiary takes over as the account holder, regardless of anything that is written in your will.
A life insurance policy
A similar thing happens with life insurance policies, which also come with a beneficiary designation. In some cases, there could be a conflict between the two. Maybe the life insurance paperwork only names one beneficiary, but the will says that the money should be distributed among multiple people. In a case like that, it is the life insurance beneficiary designation that will take precedence.
There are ways to address these potential financial issues, so be sure you know exactly what legal steps to take when making your estate plan.