If you thought, as I did, that your will would cover the transfer of all your assets, you’d probably be surprised to find out that you’re not entirely correct. While you can spell out who you want to get what, there are many cases in which other contracts or agreements trump the will. I erroneously thought that what you said in your will goes, but in many cases, you don’t actually have any say in how possessions are transferred. Let me use a prime example and you’ll probably understand what I mean.
Let’s say you pass away and decide to will your house to your son John Doe, to make up for a lifetime of ridicule because of your poor naming skills. Unfortunately, despite what your will might say, if you co-owned your house in a “joint tenancy with rights of survivorship,” then the other joint owner gets the home. The existing contract you have with the joint owner supersedes your will. This is typically what happens if you own a house with your spouse and in this case the surviving partner gets the home. Now, if you owned the home as “tenants in common,” then you can determine who gets your piece of the house. Again, this makes sense because your will can’t supersede an existing contract, it just wouldn’t be fair. See how simple it is? Here’s another example.
Investment and banking accounts
In most states, your investment and banking accounts (including retirement accounts) go straight to your designated beneficiary, underscoring the importance of specifying one on record with the financial institution. If you were to specify a different person in your will, the laws of the state will specify which takes precedence.
Ultimately, you can specify anything you want but if there’s an existing contract or an easier mechanism for specifying beneficiaries, then you should defer to them instead. While specifying it in the will doesn’t hurt, just know that in some cases the will won’t be able to enforce your desires.