Richard Morgan at Morgan and Disalvo. This is part of our back to the basics newsletter series. The topic right now is going to be how assets pass at death. This is a big issue that most people don’t quite get. So, one of the misconceptions is if your will says your assets go that way, that all your assets actually go that way in your will. That is not necessarily the case. So how to assets pass at death? First, beneficiary designations under contract law, so certain assets must pass by beneficiary designation, IRAs, qualified plans like 401ks pension plans and the like, life insurance, and annuities. They have to. Financial assets like financial accounts, brokerage accounts, checking accounts, securities, They may pass by POD or TOD: paid on death or transfer on death, which are voluntary beneficiary designation. So those will go directly to the beneficiary at death period. No, it doesn’t it go anywhere else.

The second one is joint ownership. So, you can own joint property in Georgia in two different ways: tenants in common, kind of like like 50/50. one person dies, half goes down to the estate, half stays with the surviving owner. Nothing passes. The other types of joint ownership is joint tenants with right of survivorship. That means that the first death, bam, it just goes to the survivor. No will, no nothing. If there is a trust that exists while you’re alive, you put assets in it and it’s there when you die, then the trust will control those assets. So beneficiary designations, right to the beneficiary. Joint ownership, right of survivorship goes right to the survivor. If there’s a trust and assets in it when you die, it goes into the trust.

Everything else drops down in your theoretical estate, that’s your probate estate, and that’s controlled by your will. So, the will does control probate assets but nothing else. And that’s key about making sure the plan works properly, because a lot of people, the plan will go that way, the documents go that way and if the assets go that way, they don’t meet and it is what it is.

Richard Morgan, Morgan and Disalvo

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