What Happens to Your Assets When You Die?

Because we don’t like to talk or think about death, we find many people don’t understand what actually needs to happen after a death. Many of us think, “My estate and assets will go to my kids. I’m sure my decades-old will will suffice in making this happen.” Wouldn’t it be nice if it were that simple! But just as things in life are not simple, things in death are equally complex.

We have written this “After a Death” series to explain what will happen to your assets at death so that you can plan accordingly. What will happen to your assets and your debts? What taxes will be incurred? What roles will need to be filled and who will fill them?

We know that this process can be difficult. Loved ones need to take time after there has been a death to absorb the significance of what has just happened and to learn what to do next. Very rarely do any of the steps in this series need to happen right away. Everyone needs time to mourn a loss. As a general guideline, we recommend that an estate administration attorney should be contacted within two weeks to a month of someone’s passing.

Let’s start with the positive side of the balance sheet: your assets.

(Before we get started, have our After a Death glossary open so you can quickly look up some of the more obscure terms you might find in these articles.)

Will my assets have to go through probate (and what is probate anyway)?

“Probate” is a court process that legally declares your will (if you had one) as valid, determines your heirs or devisees, appoints a Personal Representative, and administers the estate. Probate is only required if you owned assets in your own name that do not pass to someone else automatically.

What happens to my accounts?

Your checking, savings, and investment accounts will pass to the joint owner if there is one. (There are certain exceptions to this rule though.) Or, if you designated a person or trust as a “Transfer on Death” or “Payable on Death” beneficiary, then the account will transfer to that beneficiary. The beneficiary should get in touch with the financial institution. If there is no beneficiary named, it will become probate property and pass according to your will, or, if there is no will, according to the intestacy laws of Massachusetts.

Retirement accounts, or IRAs, often have a beneficiary named who receives the account upon your death. The beneficiary should get in touch with the financial institution. If the named beneficiary is deceased, the institution will have its own rules on what happens to the account.

Life insurance almost always has a named beneficiary. The beneficiary should get in touch with the life insurance company to begin the claims process.

What happens to your personal property?

If you had a will, it will determine who receives your personal property like jewelry, cars, clothes, and furniture. If you did not have one, your personal property will pass to your heirs. Often people choose to donate whatever the family does not want (like clothes and furniture).

What happens to your real estate?

This depends on how you owned your real estate and other terms in your deed. This is often the most complicated question to answer and it has significant legal ramifications. If you owned it individually, it will pass according to your will, or to your heirs if they were intestate. If there is a co-owner, the specific language in the deed will determine whether the co-owner now owns all the real estate, or if a portion of the real estate will pass according to the will or to the heirs. The three most common ways two or more persons may hold title to real estate are: Tenants in Common, Joint Tenants, or as Tenants by the Entirety.

Need help with this process? We have a solution. We offer a service called TrustCase™, that administers and settles your estate through a collaboration among family, trustees/ executors and lawyers. Click here to learn more.