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.

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Filed Under: Estate Planning

About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.

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