You are finally going to take that important step of making a will—congratulations! Like many Californians, you are making a responsible decision for your family and heirs. While you are gathering your thoughts and financial documents, there are a few additional items to consider before you begin planning.
The State Bar of California points out that you are likely to have one or more assets that are independent of your will. These items range from community property that you own with a spouse or partner to a living trust, life insurance and more.
Community property and joint tenancy
Community property owned by you and a spouse or domestic partner is not covered by a will. If you share title to an asset with “right of survivorship,” the asset goes directly to the survivor upon the death of a partner. This arrangement works the same way for other assets that you hold in joint tenancy with a spouse or business partner and includes items such as stocks, real estate, bank accounts and cars.
Life insurance and retirement plans
When you purchase a life insurance policy or begin a retirement account, such as an IRA or 401 (k), you must choose a beneficiary. The persons you name on the policy and account forms receive the payout when you die, without being influenced by your will’s beneficiaries.
If you have established a revocable living trust to manage your assets, you may have named yourself as the trustee to begin. Should you become incapacitated, the person you choose as a successive trustee then manages the trust for you and transfers the assets to your beneficiaries without involvement from the court.
Of course, you don’t need to have everything nailed down before you meet with an attorney for the first time. But having given some thought to these issues beforehand can help you be more prepared and get more out of that all-important first step in estate planning.