Quarantined – take the time to review your estate planning documents, joint tenancy agreements and beneficiaries

COVID 19 – Is Your Estate In Order? Non-Probate Transfers and Pitfalls of Beneficiary Designations

In the wake of the recent Corona virus pandemic, many people are understandably concerned about their estate plan. A common misconception is that if you have executed a will or even a trust, then you are all set. In fact, it may not be that simple. In fact, a will is not the only instrument capable of passing down an estate to the decedent’s heirs, and some assets may not be controlled by your will and/or trust at all.

For example, in a joint tenancy with rights of survivorship, the property automatically passes to the surviving owner. So, if A and B own a piece of land in joint tenancy and A dies, B immediately gains full ownership of the land, without a probate administration. A’s right to the land extinguishes and thus, A has nothing to leave to his heirs through a will, or otherwise. Another way to avoid probate is through accounts with Transfer-on-Death (TOD) clauses. An account with a TOD beneficiary will transfer the ownership of the account will be transferred to the beneficiary at the decedent’s death, without a will or trust.

But what happens when one instrument conflicts with another? What if your will devises all of your property to beneficiary A, but you have a bank account that names B as a TOD beneficiary? Or, going a step further, what if your will has specific language changing the TOD beneficiary designations of your accounts? Will that be sufficient to control the disposition of that asset? Generally, assets titled jointly with rights of survivorship, any payable-on-death accounts, and other assets with beneficiary designations are non-probate assets. Non-probate assets due not fall under the purview of a will and cannot be bequeathed via a will. Nevertheless, if your will and/or trust seem to conflict with a TOD beneficiary designation of the way an asset is titled, such an arrangement is likely to lead to litigation among the potential conflicting beneficiaries.

Now is a good time to revisit family affairs and your estate plan, ensuring that your estate is in order, especially during this Corona virus pandemic. If you are interested in more information in how to best effectuate your wishes, or if you want an experienced estate planning attorney to review your estate plan, please do not hesitate to contact the lawyers at Chepenik Trushin LLP, who are experienced, ready, and willing to help – Bart Chepenik, 305-613-3548, Brad Trushin, 305-981-8889, we are Open and always available.

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