A client comes in and discusses her estate plan. She does not own any real estate, only has an IRA, two bank accounts and some CDs at the bank. We discuss how she can name beneficiaries on all of her assets and her estate will not to go through probate. We do not discuss who her named beneficiaries are.
She dies and her stepdaughter contacts me. The stepdaughter has a copy of her mother’s Will, which is 20 years old. The stepdaughter wants to probate her stepmother’s Will and be named Executor, as stated in the Will.
By this time, the stepdaughter knows that a friend of her mother’s is the beneficiary of the IRA and joint owner on the bank accounts. There are no assets passing under the Will; the stepmother’s estate does not go through probate. Most upsetting to the stepdaughter is that she is not going to be the Executor. (Only the probate court can name the Executor; no one becomes an Executor just by being named an Executor in a Will.)
Then I am talking to the stepdaughter and her husband on the phone. The husband asks if I have reviewed the Will, which I have. Then he asks if I noticed that there are four beneficiaries of the Will, one being his wife. I have. Then he states the obvious – the Will is in conflict with the beneficiaries named on the IRA and the joint bank accounts. This is when I am practically yelling at him that the named beneficiaries control. What the Will says makes no difference!
Now the stepdaughter wants to know how they are going to know what assets her stepmother had if there is no Executor. The truth is that even an Executor can’t call the company holding the IRA and find out who the beneficiary is. The company will only deal with the beneficiary.
Now the husband wants to know if I will represent them on this matter. No, I will not. There is no matter!
This is often a difficult legal issue to understand. A Will only applies to assets that are going to pass under the terms of the Will. If the assets have named beneficiaries, the assets pass directly to the named beneficiaries. What the Will says does not control.
Also, for assets with joint owners, such as the bank accounts in this situation, the assets pass to the surviving owner of the bank accounts. Again, the Will does not control. Finally, a person does not become an Executor until the probate court names the person as Executor. All the time I hear people say things like “I am my mother’s Executor.” I know they aren’t because their mother is still alive! They are only going to be their mother’s Executor if the estate is probated and they are named Executor by the Court.