Law FAQ: My mom’s will leaves everything equally to me and my sister. Why am I not getting anything?

A person’s will only applies to assets or accounts that are in the person’s sole name or are payable to the person’s estate.  Typically, we are dealing with assets in someone’s sole name name if we are looking at someone’s will.  I frequently tell clients that assets are often payable to someone’s estate on accident.  For example, assume mom’s husband was named as beneficiary on her life insurance policy.  He dies several years before her, and she never added another beneficiary and does not have a contingent beneficiary on the policy.  In most cases, that policy will say her estate is the beneficiary by default.

The important thing to note is that jointly-owned assets and assets with a beneficiary designation do not pass pursuant to mom’s will.  They pass upon death by operation of law, which means that jointly-owned assets pass to the surviving owner and accounts with a beneficiary designation pass to the named beneficiary on the account, regardless of what mom’s will says or if she has a will.  These assets do not pass through probate, and mom’s will does not apply to these assets.  So, if sister was the joint owner on mom’s checking account and CDs because she was the primary caretaker, the checking account and CDs belong to the sister upon death, even if the will specifically says everything is to be divided equally between the children.  This means that your sister gets everything, and you get nothing.  The will simply does not apply to the distribution of these assets.  To add insult to injury, if your sister wants to fulfill mom’s intent, she may have to deal with gift taxes and the gift tax ramifications of splitting the accounts with you.  Thus, even if sister wants to split the accounts because she knew what mom wanted and wants to comply, she may not want to split the accounts bad enough to pay gift tax on the transfer from her to you.

In many cases, this result is not what mom wanted or intended.  I will be posting more in the coming weeks about intent versus content because all too frequently the content of someone’s will or trust or the structure of their assets do not coincide with what their intent.  After someone dies, it is often too late to reconcile the two, even if most people involved agree as to what the person’s intent was.  An effective estate plan can prevent this disparity between intent and content.   Unfortunately, the true test of an estate plan occurs after someone dies when it is often too late to go back and correct the discrepancy.  Please contact our office if you need assistance in establishing an estate plan or determining if your plan accomplishes your goals and intentions.