Your will allows you to name someone to serve as a guardian and take care of your children. It also allows you to control who receives specific property from your estate.
Many people are overzealous in their desire to name beneficiaries for assets when planning their estate. They will include property that does not belong in a will and which might lead to challenges in New York probate court or potentially an outcome other than the one intended.
Which assets should testators be careful about including in their wills?
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Life insurance proceeds
One of the most common mistakes people make when drafting wills is to include the payout from their life insurance policy. When you purchase your policy, you name a specific beneficiary or possibly multiple beneficiaries who will share in the proceeds should you die unexpectedly.
The beneficiary designations filed with the insurance company are what matter. Those who include life insurance proceeds in their wills often assume a specific person will receive the money, but unless the will reflects the paperwork filed with the insurance company, there could be complications ahead.
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Assets used to fund a trust
When you move your home into a trust, you are no longer the sole owner of that property. The trust is the legal owner and will retain ownership even after your death.
Including trust assets in your estate plan can lead to a mess in probate court. People may have unreasonable expectations about their inheritance rights, and you may have died assuming that some people would have support and resources that they ultimately will not.
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Assets owned jointly with another person
Typically, when you are a co-owner of assets, like real property, businesses or motor vehicles, you will need to plan specifically for those assets to transfer after your death. Any assets owned with someone else or that you have already arranged to transfer to another person will complicate your estate.
Not only does including some of these elements in your estate plan increase the likelihood of someone challenging your estate later, but you might overlook the steps you actually need to take to achieve the goals you have for your legacy. Learning more about the rules that apply to New York estate plans and probate proceedings will help you during the estate planning process.
