A will is one of the most important estate planning tools you can ever create. With a valid will in place, you can have peace of mind knowing that your assets will go to the right beneficiaries when you die.
However, not all assets belong in your will. Understanding what you should (and should not) include in your will is key to ensuring that you create a document that will be devoid of disputes when you are gone.
Here are three types of assets that do not belong in your will.
Assets that have a right of survivorship
A will should contain assets that are solely owned by you. Thus, you should never include any jointly owned assets or community property with the right of survivorship in your will. Such assets automatically pass down to the surviving co-owners upon your death.
Assets that have been used to fund a trust
Any asset that is held in a trust automatically passes on to the named beneficiary as stipulated in the trust instrument upon your incapacitation or death. As such, they should not feature in your will. In fact, one of the reasons people set up trusts is to avoid the lengthy and expensive probate process.
Assets with designated beneficiaries
Certain assets allow you to identify a beneficiary who will inherit them upon your passing. Such assets pass directly to the designated person or entity without going through probate. Some of these assets include retirement accounts like 40Ks, IRAs and pensions, life insurance, transfer on death assets like stocks, bonds and vehicles and payable-on-death accounts.
While creating a will may seem relatively simple, it is important that you know the assets you should include in it and the ones you should not. Experienced legal guidance can help.