Presented by: Bradford & Holliman, Estate Planning, www.bradfordholliman.com
Parents often prepare Wills leaving assets equally to their children and then make mistakes with their accounts that favor one child over the others.
By Mistake: Sally Denton’s Will leaves her assets equally to her three children. To help pay bills, Sally made the mistake of adding her son, Ralph, as a joint owner on her checking account, savings account, and certificates of deposit instead of setting up a Power of Attorney. When Sally dies, Ralph has full ownership of those accounts and is not obligated to divide those accounts with his siblings. Why? The joint ownership titles void the terms of her Will.
On Purpose: Wilma Parker and her son, Carl, rarely speak, and Wilma has not seen her granddaughter for years. Her daughter, Annette, is very close to her mother and handles shopping, cooking meals, and taking Wilma to appointments, and cooking meals. Wilma’s Will leaves her assets to her two children equally, but Wilma also has a life insurance policy for $300,000 that names Annette as the sole beneficiary. Wilma intends for Carl to inherit some assets, but she purposely intends to leave Annette much more.
A probate estate consists of all the assets owned at the time of death. If no beneficiary is named on an account, the bank or insurance company will pay the proceeds of the account into the probate estate, and the assets will be distributed under the terms of the Will unless joint owner or beneficiary designations override the Will.
It is fine to knowingly plan for assets to pass to certain people outside of probate. Just make sure you realize when you are deviating from your Last Will and Testament to do it on purpose, not by mistake.
-Melanie Bradford Holliman
Partner, Bradford & Holliman, LLC
Practice focuses on estate planning, elder law and special needs trust.
2491 Pelham Parkway, Pelham, Ala. 35124
This article is for educational purposes and is not intended for specific legal advice.