The more common problem is, “Mom wants to make it easy on the family when she dies. She’s got two daughters. She puts one daughter on her bank account as a co-owner to help her out with bills. She doesn’t mean to disinherit the other children. She thinks: ‘When I die, this daughter can divide it.’
Most people think the will trumps everything. But, a beneficiary designation (like bank accounts) trumps the will,” says Lee Cave, an estate planning attorney. “The daughter is not required to share the money.” As a co-owner or beneficiary, the daughter would inherit it all.
“You need a will, but you can make it easier on your family by making beneficiary designations. If it’s a cash account like at a bank, it’s Pay on Death. For an IRA, it’s Transfer on Death. They are considered by lawyers as a will substitute,” he says.
Extra tidbit: Read more about the benefits of writing a will in part five of this feature.
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