Creating a will is, without a doubt, one of the most responsible things you can ever do. In fact, a will is the foundation of the estate planning process. Done right, you can have peace of mind knowing that your hard-earned assets will pass down to the people and causes you believe in.
However, not every single asset in your name belongs in the will. For this reason, it is important to understand what assets you should include in your will and what you shouldn’t. As a rule (or good practice), here are three assets you should keep out of your will.
1. Assets that you co-own with someone else
You can only bequeath assets that are entirely in your name. Thus, assets that are held in joint tenancy with the right of survivorship do not belong in your will. Likewise, you cannot include community property in your will. Such assets usually automatically pass down to surviving co-owners upon your demise.
2. Assets that you have placed in a trust
Just like a will, a trust allows you to set aside assets for your beneficiaries. These assets are managed by the trustee on behalf of your beneficiary and automatically pass down to them when you are incapacitated or upon your death. Still, assets that are held in a trust do not go through probate.
3. Assets that have designated beneficiaries
Certain assets allow you to name someone as a beneficiary upon your demise. Thus, when you die, such assets directly pass down to the individual or entity you designated as the beneficiary without the need for probate. Some of the assets that come with designated beneficiaries include payable-on-death bank accounts, retirement accounts like pensions, 401(K)s and IRAs and transfer-on-death properties like bonds.
Creating a will is never as simple as it sounds. Find out how you can avoid costly mistakes while creating your will in Minnesota.