FAQ: What Property Doesn't Need a Will? (Beneficiary Designations Deluxe.)

Certain forms of accounts and insurance policies are based on contracts and will not pass to another person after your death via a Will. These types of assets pass according to beneficiary designations listed with the institution as part of your contract.

Beneficiary designations are also called TOD or POD... meaning Transfer on Death or Payable on Death provisions. Almost all financial institutions have this feature for their products including checking, savings and brokerage accounts. However, many internet only banks are not offering this feature. If you have large sums of money in an internet only bank, be sure to make it a joint tenant account or transfer your money to a brick and mortar bank.

In addition, property held in certain joint tenancies with a right of survivorship (e.g., joint bank or brokerage accounts, real estate owned as joint tenants with a right of survivorship) pass directly to the surviving joint owner.

So how does it work?

For example, proceeds from life insurance policies pass to beneficiaries named in the policies, and retirement accounts and annuities pass directly to the beneficiaries named in those contracts.

The company is notified of your death by a beneficiary or other loved one. The company will send out letters to all beneficiaries listed with instructions and documents necessary to receive their share of your assets.

Often times the company will offer a complimentary product funded by the asset. In case of a life insurance policy payout, the insurance company may open a money market checking account with the proceeds of the death benefit and send the beneficiary a book of checks. The beneficiary can then write checks to transfer the money as appropriate.

For joint tenancy in real estate...

You will want to notify the county recorder of the death of joint tenant by recording an Affidavit of Death of Joint Tenant.

Other joint tenancy in banking...

Notify the financial institution and follow their policies for reporting a death of a joint tenant.

Be sure to review all of your beneficiary designations and joint ownership agreements to be sure that they reflect your wishes.