How A Will Substitute Can Sink Your Estate Plan

“But it says so in my will, in black and white!”  That was the frustrated response I received after explaining at an estate planning seminar that a house held in joint tenancy would not be distributed according to instructions in a will.  We have all been led to believe that our last will and testament represents the final word regarding how our worldly possessions are distributed.  The truth is that the all-powerful will–with its legalese, eloquent fonts, and ceremonious formalities–can be easily defeated. 

There are a host of options for transferring property at death besides a will.  These alternatives are generally referred to as “will substitutes.”  Will substitutes include payable-on-death forms, joint bank accounts, joint tenancies, and trusts.   One feature all will substitutes have in common is that they avoid the complex judicial process known as probate.  Another similarity is that property passing at death using a will substitute bypasses a valid will.
 
Most Americans will transfer some kind of property through a will substitute at death.  A periodic review of your retirement accounts, life insurance policies, deeds, bank accounts, and investment accounts, which often contain many of the will substitutes named above, is helpful in determining whether property passing at death according to these will substitutes is consistent with your wishes expressed in your will.  

Will substitutes represent an effective and efficient alternative to the probate process, but diligence is required to ensure your estate plan is not torpedoed by a will substitute.   

Bruce R. Durkee, J.D., CPA
Senior Vice President/Chief Legal Counsel
Assemblies of God Financial Services Group