Kenneth Kando Attorney at Law
 
Personal and confidential legal representation.

 

 When I Die, Who Gets My Assets?

 

Automatic Transfer of Assets Upon Death:

• In general, any assets standing in your name upon your death that have either at least one co-owner or surviving named direct beneficiary for that asset will transfer automatically to the co-owner(s) or direct beneficiary(s) upon your death, whether or not a probate estate is opened. In fact, your probate estate will not include these assets as they automatically become owned by other(s) upon your death.

• No provision in your Will alters this automatic transfer upon death of assets that had either a co-owner or a named direct beneficiary. (Note: the "beneficiary" referred to here is a beneficiary of the particular asset, such as a bank account, life insurance policy or IRA. This type of beneficiary is different from a beneficiary named in your Last Will and Testament.) 

• Therefore, if you die leaving a Will that has a provision that gives 50% of your IRA to a long-time friend, forgetting that you had years ago named another person as direct beneficiary of the same IRA, the Will provision generally has no force and effect and your long-time friend takes nothing -- the direct beneficiary named in your IRA automatically becomes owner of the entire IRA upon your death.

• Always know which of your assets will go to direct beneficiaries or co-owners, and which will become part of your probate estate and pass under your Will. There is no substitution for a thorough estate plan.

 

Exception for Accounts Held "For Convenience Only":

• One exception to the rule that a co-owner automatically owns the funds in a bank account is when you have the name of another person, such as a child, on one or more bank accounts solely for your convenience -- so that the child can do your banking for you. In such a case, those assets should not transfer to the other named person upon your death. 

• Be careful to make your intentions very clear with a bank or other financial institution when adding the name of another person to a financial account "for convenience only". It must be clear that the account is not a typical "transfer on death" (or "TOD") account. Any such confusion can lead to a serious family dispute, hard feelings and possibly legal proceedings after your death.

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What Happens with my Will when I Die?

• Assuming your Will is found after your death, the document has absolutely no legal force and effect until it is presented to the probate court in the city or town in which you resided at death and then "admitted" by the probate court judge.

• The validity of a purported Will can be challenged, for example, by claiming the signature is a forgery or was coerced, or that the Will was revoked by the signing of a more recent Will.

• Wills prepared by attorneys are less susceptible to challenge.

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What Happens to my Assets when I Die?​​

• Generally, any of your financial assets will be transferred to any named co-owner(s) or named beneficiary(s); and any real estate transfers automatically to any joint tenant(s).

• Generally, any other assets belonging to you upon your death become part of your probate estate. Only the legal representative of your probate estate has the legal authority to collect these assets after he or she has been appointed by the probate court. 

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Probate Assets Distributed to Beneficiaries or Heirs-At-Law: 

• Assets belonging to you that were not transferred automatically to a co-owner or beneficiary upon your death will typically become assets of your probate estate to be distributed to the beneficiaries named in your Will. 

• If you didn't leave a Will, or if no Will is found, then your probate assets will be distributed to your "heirs-at-law", which include your surviving spouse and/or children, or nearest blood relatives if you did not leave a spouse and/or children.

• In the very rare event no Will and no blood relatives of yours are found, your property could be transferred to the General Treasurer of the State of Rhode Island. Ordinarily, distant relatives will be found, even if it takes the efforts of genealogist or other person trained in locating heirs to find them.

 

Can a Person be named as a Beneficiary in a Will, but still not get anything from the Probate Estate?

• Unfortunately, the answer is “yes”, and this happens all the time. People often name beneficiaries in their Will to receive assets that will not be available when they die. If so, the “bequest” to that beneficiary is “unfunded.”

• For example, if a decedent left a Will that leaves $10,000 to a deserving caretaker, friend, or family member, but virtually all of the assets of the decedent were in a single investment account that named someone else as the direct beneficiary on the account, then the assets go directly to the named account beneficiary and do not become assets of the probate estate to be distributed to the beneficiary named in the Will.

• Careful estate planning is necessary to ensure that a person’s assets are distributed in the manner intended by the decedent. Unfortunately, many people assume their affairs are in order and then will not be around to see the unintended consequences of improper estate planning.