A well-crafted Will forms the foundation of a secure estate plan. It clearly outlines your wishes for asset distribution after your passing. When planning your estate, it’s essential to ensure all your assets, including those in foreign countries, are properly accounted for and that your Will provides for distribution to the person or persons you intend. But what happens to assets you forget to include? These assets not explicitly covered by a Will and that are not non-probate assets fall to the residue or residuary of your estate. Understanding the fate of these assets can help you create an estate plan, minimizing confusion and potential disputes.
Non-Probate Assets
Non-probate assets bypass the will and are distributed based on other legal mechanisms or default state laws. These include joint accounts, retirement accounts with designated beneficiaries, life insurance policies with designated beneficiaries, and properties held in trust:
- Joint Accounts: Joint bank accounts or property held in joint tenancy pass directly to the surviving co-owner, bypassing the probate process entirely. This ensures immediate access to funds or property by the surviving joint owner.
- Retirement Accounts and Life Insurance Policies: Assets with designated beneficiaries also bypass probate. Beneficiaries named in these accounts receive the assets directly, making it crucial to keep these designations current to avoid unintended distributions.
- Real Estate held Joint with Rights of Survivorship: Real Property held Joint with Rights of Survivorship passes to the joint owner as a matter of law, bypassing the probate process.
- Assets Held in Trust: Trusts allow for the efficient transfer of assets without probate delays and costs. They also provide privacy, as the distribution of trust assets is not a matter of public record.
Residue / Residuary
For assets solely owned and not specifically called out and gifted or included in a Will or trust, the assets become part of the residue or residuary, i.e., the remainder. These assets are distributed to whoever the Will designates to receive the remainder or all other assets or in the event the Will does not designate remainder beneficiaries, to your heirs. In many cases, the majority of the assets go to a spouse or equally to children, etc. and no specific gifting is required, however, in instances where it is the intent to provide specific assets to specific persons, charities, etc., it is necessary to either include specific gifts of the assets in a Will or trust or to ensure that beneficiary designations are in place.
Protecting Your Legacy
The best way to ensure your assets are distributed according to your wishes is to have a comprehensive estate plan. Regularly reviewing and updating your estate plan is essential to account for all assets and current beneficiary designations. Working with our experienced attorneys at Grissom Law, LLC can help you create a thorough estate plan that addresses all your assets, minimizing the risk of unintended distributions and ensuring your family’s financial future is secure. Contact us today!
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney client relationship between you and Grissom Law, LLC