The property that you accumulate over your life is very important. If you have a will, then you have specified where you want your property to go at the time of your death. However, not all property can be passed to beneficiaries through a will.
What property does not pass by means of a will?
While most of your property can be passed through a will, there are certain assets that you cannot bequeath through a will depending on how you hold title to them or the category they fall into. These assets do not pass through a will because you usually designate a beneficiary on the document itself. These assets pass outside the will instead of through it because they also avoid probate when you die and thus automatically pass to beneficiaries through another legal process.1
Anything with your name alone on it will be able to go through your will.2 This includes bank accounts, household items, and any separate property you may own. Property that is owned in real estate as tenants in common with someone else will also pass under your will, but a joint co-owner will pass to the co-owner.3 Property that you own as joint tenants with a right of survivorship is a prime example of this. Further, since Arizona is a community property state, only your share of community property may be bequested under a will.
Life insurance proceeds and proceeds from pension plans or retirement plans will also pass to the beneficiary directly unless you name your estate as the beneficiary.4 Similarly, trusts such as Totten Trusts that have a payable on death (POD) provision or banking and investment products with a transfer on death provision (TOD) will go directly to a beneficiary. Similarly, inter vivos trusts or living trusts are a good way to keep assets safe and have them either go straight to a beneficiary or be held for others during your lifetime.5
Gifts that you make during your lifetime or personal property that is small enough that it does not need to be listed in your will do not need to pass through a will. The gifts already got to where you wanted them to go and the personal property with little monetary value will not really need to pass through probate. There is usually a limit to the amount you can gift per person per year before you have to file a gift tax return.6
How should I get this property to go where I want it to?
Luckily, the reason these types of property do not pass through a will is because the name of the beneficiary is designated on the document itself. For example, on any annuities, life insurance, IRAs, and retirement plans the assets will pass to the beneficiary you designated upon your death.7 Therefore, it is really easy to get the property to go where you want it to. You should make sure to always update the beneficiary on your life insurance policy or retirement accounts. Further, you should always make sure you build your trusts to serve the proper purpose (i.e. set up your trust so it achieves what you intended it to).
1 Assets That Do Not Pass Under A Will, LAW.FREEADVICE.COM, http://law.freeadvice.com/estate_planning/wills/assets-that-do-not-pass-under-will.htm (last visited Jan. 21, 2015).
2 Terri L. Giampertroni, Some Basic Facts About Wills, MYLEGALSTRATEGIES.COM 1, http://www.mylegalstrategies.com/pdfs/estateplanning/somebasicfactsaboutwills-article.pdf (last visited Jan. 21, 2015).
3 Id. at 1.
4 Assets That Do Not Pass Under A Will, supra note 1.
6 Wealth Transfer& Gift Strategies, WELLSFARGOADVISORS.COM, https://www.wellsfargoadvisors.com/financial-services/estate-planning/gifting-wealth-transfer.htm (last visited Jan. 22, 2015).