A will, as many know, controls how a deceased’s assets are distributed and to whom they should go to. These reflect the last wishes of the deceased, so it’s taken into grave consideration by the courts. However, there may be instances wherein the named beneficiary in the will and the asset distribution instructions are not followed.
To give an example, a mother’s will may say that she wants all her assets to be given to her son. However, during probate, the daughter gets the IRA. Naturally, the first instinct of the son, just like most clients, would be to sue. However, this lawsuit is not going to be successful because legally, a will can be superseded by a private agreement.
A will is a court document, which means that to enforce it, it has to go through a court process. The will is merely a guideline for the court system and hence only controls what happens in court. It does not take into account the other ways that property can be transferred. Some of these include:
- A contract, for example, between the deceased and another party may have been present, indicating a transfer of property.
- Beneficiary designations or pay on death designations on insurance policies, IRA, 401(k), brokerage account, savings account, etc. These function the same as contracts.
In case there have been property transfers in this manner and that asset has skipped probate, the will cannot control it. So even if the will says that one child will get everything but there is a private agreement such as the beneficiary designation form that transfers the ownership to another child, there is nothing that can be done to retrieve that property.
Even if the beneficiary designation was done several years before the will was drafted, the private agreement will still supersede the will. So it’s important that people constantly update their beneficiary designations to reflect new situations in their lives.