Mistaken belief that your will controls everything

VIDEO TRANSCRIPT:

Hello everyone, this is Rob Mansour. And I wanted to make a very brief video today about a phone call that I took today that I think is a very illustrative of a mistake that a lot of people make. So here's the scenario. This lady calls me, her name is Linda and she calls me about her father Paul, who passed away three years ago and she is now concerned about the estate and why she didn't receive the inheritance. First mistake - you shouldn't wait three years. You may forfeit any claims that you have if you wait that long. So that's the first issue. The second issue is she told me that her father had a life insurance policy and she thought all four of the kids were supposed to get a portion of the life insurance policy.

And she said that the reason she thinks that is because her father's will said that all four kids should inherit equally. I explained to her that a life insurance policy doesn't work with the will. The beneficiaries are whoever is listed on the beneficiary form and it turns out her father only wrote her sister Michelle. So Michelle got the life insurance policy and Michelle used that money for whatever she used that money for. I told her that Michelle has no legal obligation to share the insurance proceeds if she was the only beneficiary on the policy, no matter what the will said. The only other thing that her father had when he passed away was a fully paid for house with about $500,000 in equity.  Before he died (several years before) he put his daughter Michelle on title with him. Now what that means is that his daughter and Michelle is a joint owner on the property.

So Linda says to me, I thought I was going to get part of the house because the will says that we are all to share equally. And I had to explain again, the joint ownership trumps whatever the will says. I told her the will doesn't matter if Michelle was on the property with her father Paul, and then Paul passes away. Michelle owns the entire property. And that's what happened in this case.

So the mistake that some people make is waiting too long, first of all. And the other mistake that some people make is they think that the will controls everything. The will does not control anything when it comes to beneficiary designations on a life insurance policy and joint ownership. The last person standing and gets the entire asset, a will only controls assets that are in your name alone that do not pass by any other means. And in this particular case, the life insurance policy passed by way of beneficiary and the house passed by way of joint ownership.

So I hope this brief lesson is helpful once again, a will does not trump beneficiary designations and does not trump joint ownership. Thank you very much for watching. I hope you found this video helpful.