Transferring Assets Upon Death Through a Will

A will is a relatively simple document, but it can play an important role in assisting the transfer of assets upon death. While it is possible to draft your own will, most people have an attorney draft their will. Of course, using an attorney will usually necessitate a fee, but the benefit of getting an experienced person to not just draft your will, but also advise you on estate planning may be worth the price. You may also want to check your employer benefits package, as it is not uncommon to have a legal plan that you can use to assist you with drafting a will as well.

What a Will Is, and Isn’t

Wills can help facilitate the transfer of assets, but wills do not bypass the probate process, although the probate process will go faster with a will as opposed to without. A will is a legal document, but there is no master database in which the document can be retrieved. You will need to keep your will in an accessible place that your heirs can access. Wills can also help in defining new guardians for your children, but a will cannot assist with your potential disability or need for guardianship.

using a will

A Will Shouldn’t be a Static Document

One constant in life is change. When your personal situation changes your will may need to be updated as well. Minor changes to your will can be done via a codicil, which is just an amendment to the existing will. More substantial changes may have to be done through a replacement will. Review your will periodically to assess your situation and see if anything has changed that might warrant a change in your will. Some examples of events that could cause a change:

  • A change in mind regarding beneficiaries
  • Executor dies
  • Change in family situation
  • Change in the nature or size of assets
  • Change in needs of the beneficiaries
  • Moving to a new state

Keep Your Will in a Safe Place

One of the most important things regarding your will is to keep it someplace safe. If your only copy is burned in a fire or otherwise lost, it won’t do you any good at your death. The original should be kept in a fire-proof box in your home, or left with your attorney. You may think that another good option would be a safe deposit box at the bank, but be careful. In some states, when someone dies, their assets are frozen at the bank, including lock boxes. This could delay the ability for your heirs to get into the box and retrieve the will. It is a good idea to keep copies of your will there, but try to keep the originals somewhere more accessible by family members.

The Probate Process

Probate is the legal process to handle the disposition of assets at your death. If you die with a will, it will be submitted for legal clearance to distribute your assets. If you die without a will, the court will need to appoint a local attorney as your administrator. That attorney will oversee the administration of your estate (and charge a fee for doing so.) Regardless of whether or not you have a will, the probate process generally follows this path:

  • Inventory and assess value of all property
  • Locate and identify heirs
  • Settle outstanding loans and liabilities
  • File tax returns
  • Distribute all property

Don’t Forget the Letter of Instruction

While a letter of instruction isn’t actually part of the will or even a legal document, it can be one of the most important pieces of your estate plan. The letter of instruction provides information for your will executor and your heirs to help facilitate issues regarding your death. Typically this letter will provide instructions as to where to find the will and other important documents such as life insurance policies.

This letter is also useful in that you can provide a list of your various bank and investment accounts, titles to property, burial instructions, or anything else that your executor or heirs should be aware of. Without a detailed record of accounts or letter of instruction, it can become a tedious process for your heirs to try and track down everything, and unfortunately, some may be overlooked and go unclaimed. Be sure to check out the other two articles on transferring assets upon death, there is one on using trusts and the other is on law or contract.

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

11 comments
Mary C Miller
Mary C Miller

Hello I have a qustion for an issue as far as a will goes. I have an invention going on now. It is in the stage of being patented. What kind of form do I need to have as far as if anything happens to me that my husband and my investor will be left with all the profits from this invention.
Thank you
Mary Christine Miller

Rosalind
Rosalind

My mother died on friday. What are my options with her car balance and the mtg balance?

Michele
Michele

I wanted to know if my parents need to start a trust along with a will in the event something happens to one of them. My parents have a lot of rental property and houses. I am concerned that if something happens to one of them and they cannot pay off any medical debt bills can there property (and all assets) be taken/sold to pay off the debt without a trust in place? They have a will in place but I wanted to know if everything needs to be placed in a trust as well as a will before something happens. Or will a will keep everything safe and it cannot be taken to pay off debt. Confused......

Julia
Julia

My father passed away a year ago in Melbourne, FL. Without going into a very long story, his wife of 27 years kept myself and my brother out of his life. Upon his last day on earth, she pushed us (literally) out of his hospital room. Needless to say, we have not heard one word of any will, nor have we been offered any items of my father to my brother and I.

I would like to find out the process of filing the will in Melbourne upon his death, and the process I would have to go through to view it.

Any help or advice would be appreciated for our closure.

Cathy Anne Green
Cathy Anne Green

Dad died, left will excluding estranged wife of 14 years(yet legally married) from property and assets. She has joint tenency with survivorship...so it appears this is an automatic. The wills states she is excluded from the other assests and these are to be divided equally between 6 adult children, 4 from first marriage and 2 from second. The second children believe the will is invalid as their 82 year old mother 'deserves' everything.Some assets have all 6 children named, others none.
What do you think?

milton a dorr jr.
milton a dorr jr.

when i die my daughter gets anything i have in my will i still owe on my house what happens then thanks

Jeremy
Jeremy

Leanne, in most cases, assets like stocks and other investments are "stepped up", meaning the price determined for gain/loss purposes for the heirs is based on the price on the day the person died.

So the value itself isn't frozen, as the market can make the price go up and down, but if he bought a share of XYC stock 20 years ago for $5 per share, and it was worth $10 per share on the day he died and the stock gets passed on, the person who is the new owner of the stock has a cost basis of $10, not $5. So if you sold the stock a month later for $12 per share, you have a $2 gain, not a $7 gain.

Of course, I think a few states may have different laws, and there could be estate tax concerns, and I'm not completely versed in taxes, so you would want to double check with an accountant or the attorney handling the estate to make sure how the assets would be valued in this case.

Leanne Johnson
Leanne Johnson

I will be brief, My Uncle passed away, no will or spouse in Illinois. He had Misc. stocks/bonds. Question...Is their Value ''frozen'' at time of death or when assets are sold and distributed? I apologize for my ignorance I have never had to deal with this before. Thank you, for your time.

Evan
Evan

Another Attorney however a majority of my work is fixing attorney mistakes due to a lack of understanding of advanced estate planning tools (I am the director of financial planning in a wealth managment firm).

So a caveat to J's advice - Please, if you have a net worth of over 1mil do not use an attorney that does 17 closings a week and estate planning once every 8 months

Jeremy
Jeremy

Good comment, JB. You bring up a good point in regards to transfer of assets by contract. I see so many people who have very large retirement accounts, yet no beneficiaries on file at all.

And it looks like you are skipping ahead ;) , as I was going to do consecutive posts this week about passing by contract, operation of law, and trusts. I am giving a pre-retirement seminar on estate planning tomorrow, so this information is fresh and makes it easy to write about here.

JB
JB

Great post... I am an attorney and about half of my practice is in estate planning. One thing that many frequently do not realize:
Your will does not control the distribution of all of your property. Some property passes by contract law (i.e., retirement plans, life insurance policies, etc.). This is why it is crucial to keep your beneficiary designations up to date, especially after major life events such as marriage, divorce, birth or death. Also, some property passes automatically by operation of law. This is typically joint property such as a house owned by husband and wife or a bank account owned jointly. In such case, the property passes automatically to the survivor without reference to the will.