I’m not going to beat a dead horse and tell you all of the reasons why you should have a will. Honestly, if you’d rather leave the fate of your property to the mercy of your state legislature, that’s your prerogative. But if your “to-do” list includes finally getting around to having a will created so that you can control who gets your property and who you want to raise your minor children if you die, keep in mind that there are some things you can’t accomplish in your will.
1. You can’t use a will to pass property you own jointly with another person
If you own a bank account with someone else as joint tenants with a right of survivorship, or if you and your spouse own your home as either joint tenants or as tenants by the entirety, both carrying a right of survivorship, you cannot use your will to pass your share of the bank account or house to someone else.
When one joint tenant dies, this type of property interest passes to the other joint tenant automatically, without the need for probate. And since wills only apply to property that you own in your name when you die, provisions that attempt to pass jointly held property have no effect.
The one exception to this is the unfortunate situation where the joint tenants die simultaneously. If that is the case, how the property passes depends on whether or not the wills contain any “survivorship” provisions. If not, most states have “Simultaneous Death” statutes to handle inheritance issues arising from common disasters.
2. A will cannot override accounts or life insurance policies with beneficiary designations
Any accounts, such as 401(k) retirement plans, traditional IRAs, payable-on-death bank accounts, or life insurance policies that you have already provided beneficiaries for should pass to those named beneficiaries according to the terms of the account or policy. These are non-probate transfers – essentially contractual obligations between you and the bank or insurance company – and cannot be overridden by your will.
3. Property you’ve transferred into a trust is something you can’t accomplish in your will
As soon as you retitle property into your trust, the distribution of that property is controlled by the trust terms. The trust beneficiaries are the ones who receive payments from the assets held by the trust. In addition to spelling out the distribution schedule and defining how much discretion the trustee has when making distributions to beneficiaries, the trust terms will spell out exactly how the trust terminates and who should receive the final distributions.
4. Generally, you can’t use a will to disinherit your spouse
Short of a valid prenuptial agreement, if you are under the impression that you can disinherit your spouse by leaving them out of your will in favor of other family members or even friends, think again. In many states, the surviving spouse has a statutory right to elect a certain percentage of their deceased spouse’s estate if they feel that the share provided in the will was insufficient. However, the size of this share varies from state to state, as do the assets that can be included in this elective share.
For example, in Massachusetts, the surviving spouse can waive any provisions that have been made for them in their late spouse’s will, and they can claim a portion of the estate as defined by Massachusetts law. This is commonly referred to as the statutory forced share, and while it does allow the surviving spouse to recover something, it may still produce unfair results.
5. You can’t attach conditions on gifts in a will that are illegal or against public policy
It should go without saying that if something is illegal to do while you are alive, it is illegal to include in your will. For instance, you cannot include a provision in your will for the establishment of an underage drinking hall, or other similar provisions that promote illegal conduct.
Along those same lines, while you are free to put conditions on gifts during your lifetime that may violate public policy, beware of including such “dead hand control” provisions in your will. To that end, courts do not look favorably on will provisions that attempt to place conditions on gifts such as restraining the beneficiary from marrying someone from a certain race, or conditions that encourage divorce or that the beneficiary practice a specific religion. These types of provisions are routinely held to be against public policy, and as such, are void and unenforceable.
So while there are a number of good reasons that should prompt you into creating a will, you might want to think again if your plans include one of these goals. Knowing what you can’t accomplish in your will is as important as knowing what is acceptable.