A will is often the weakest document in an estate plan. Account titles and beneficiary forms override it, so if you read only the will, you can miss where most of the money goes.
Every asset reaches heirs in one of two ways. Probate assets are held in the decedent's sole name with no beneficiary. They pass under the will through probate, a court process. Everything else passes by contract or by operation of law, meaning automatically because of how the asset is owned. When you gather client facts, record each account's title and its named beneficiaries, because those answers decide who inherits.
In a joint tenancy with right of survivorship (JTWROS), two or more owners hold equal, undivided interests. Each owns the whole account together rather than a separate slice. When one dies, that share passes automatically to the surviving owners by operation of law. It passes outside probate and regardless of the will. A will leaving "my half of the joint account" to a nephew transfers nothing.
Common mistakes
- Letting the will reach titled assets: A will leaving "everything to my children" does not reach a JTWROS account or a TOD account. It also cannot reach a 401(k) whose form still names a former spouse.
- Doubling the spousal step-up: Spouses holding JTWROS outside the community property states step up only half. In Example 1 that gives a $600,000 basis, not $1,000,000.
- Swapping per stirpes and per capita: One-sixth per grandchild is the per stirpes answer. One-half per surviving child, with zero to the grandchildren, is per capita.
Bottom line
- Title and forms beat the will: JTWROS, TBE, survivorship community property, TOD and POD, beneficiary-designated and trust assets all skip probate.
- JTWROS gives equal shares with survivorship (a sale or gift turns that share into a TIC), while TIC allows unequal shares that pass through probate.
- TBE is for married couples only, cannot be severed by one spouse, is shielded from one spouse's creditors, and becomes a TIC at divorce.
- Community property steps up both halves, spousal joint title steps up half, and non-spouse joint tenancy includes everything except the survivor's proven contribution.
Exam shortcut
When a stem asks who inherits, trace the asset before reading the will. Check survivorship title first, then a TOD, POD or beneficiary form, then a trust, and only then the will or intestacy. For basis questions, ask two things first. Are the owners spouses, and is it community property? That tells you whether both halves, half, or everything minus the survivor's proven contribution gets stepped up.
The full lesson (about 4,228 words, 28 min read) adds 2 worked examples, all 5 common mistakes, a self-check, free in the app.
Learning objectives
- C27
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