How Will Your Assets Be Distributed After You Die
On Behalf Of Gregory D. Supple
After you die, it is easy to assume that your will controls how all of your property is distributed. However, the truth is the will only controls the distribution of some of your property. What controls how your property is divided depends largely on whether the asset in question is subject to probate.
Probate Assets
Probate assets are possessions that are subject to the probate process. During this process, your will is examined by the court to ensure that it is valid. Once this is done, your assets subject to probate are distributed according to the terms of your will. If you did not make out a will, the purpose of the probate process is to ensure that your probate assets are distributed according to the intestacy laws of New York. In most cases, these laws only control distribution if you died without a will or your will was deemed invalid.
In short, your will (or intestacy laws) dictates how your probate assets are distributed. Your probate assets are assets that are entitled in your name only. For example, it may include your motor vehicles, real property (that you don’t own with someone else), bank accounts, personal belongings and investment accounts.
Non-Probate Assets
Not all of your property must clear probate before it is distributed. These assets are called non-probate assets. Because of this fact, your will does not affect how this type of property is distributed. Generally speaking, non-probate assets include property that has its own beneficiary designation or is jointly owned with another person. Examples include:
- Life insurance
- Pensions and annuities
- Accounts with transfer-on-death or payable-on-death designations
- Real property owned jointly with a right of survivorship
- Property within a trust
- Retirement accounts
- Virtually any other asset with a beneficiary designation
Since non-probate assets are always distributed according to their beneficiary designations, if you want to change the designations, updating your will does not accomplish the task. Instead, you must change the designation itself. Failing to do this can cause complications after your death. For example, you may inadvertently leave your life insurance proceeds to your ex-spouse instead of your surviving children. Unfortunately, there is little your heirs can do to correct this error.
For this reason (and many others) it is important to periodically check in with an estate planning attorney to ensure that everything is in order. This is especially true after major life events such as, births, deaths and divorces. An attorney can review your estate plan and make any corrections needed.