A client—I’ll call her Sarah—came to my office a few months ago. Her father had recently passed away in Manhattan, leaving a will that was clear: his entire estate was to be divided equally between Sarah and her brother. As the named executor, Sarah obtained Letters Testamentary from the Surrogate’s Court and began marshalling her father’s assets. But when she went to his bank, she was told the largest account, holding over half of his liquid wealth, now belonged entirely to her brother. The will said 50/50. The bank said 100% to the son.
The bank was correct. Years ago, her father had named his son as the “Payable-on-Death” (POD) beneficiary for that specific account. He likely did it for convenience and forgot about it. But that single, decades-old form overrode the clear instructions in his legally valid will. This is one of the most common and painful surprises families face, and it stems from a fundamental misunderstanding of what a will actually controls.
Your Will Governs Your Probate Estate—And Only That
A will is a powerful legal document that instructs the Surrogate’s Court on how to distribute your property after your death. Its authority, however, is limited to your “probate estate.” The probate estate consists only of assets titled solely in your name at the time of your death, with no beneficiary designated to receive them automatically.
Think of your will as the default set of instructions. If an asset has no other specific, legally binding direction attached to it, its path is governed by your will. But many financial assets, especially bank accounts, come with their own instructions that operate outside of probate. These are contractual obligations between you and the financial institution, and they take precedence over a will. Even a will executed with the full formality required by New York’s Estates, Powers and Trusts Law (EPTL) § 3-2.1 cannot override a direct beneficiary designation.
Prudent stewardship isn’t just writing a will; it’s understanding which of your assets will be controlled by it and which will not.
How Bank Accounts Bypass Your Will
Most conflicts I see arise when a person’s will says one thing, but the titling of their bank accounts says another. The account titling almost always wins. There are three primary ways a bank account can pass directly to a new owner, completely bypassing your will and the probate process.
1. Beneficiary Designations (POD and TOD)
A Payable-on-Death (POD) designation on a bank account or a Transfer-on-Death (TOD) designation on a brokerage account is a simple contract. You are telling the bank to transfer the funds in that account to a specific person upon your death. When the named beneficiary presents a death certificate, the institution is legally obligated to transfer the funds. Your will is irrelevant. This is precisely what happened to Sarah’s family. Her father’s intention, as stated in his will, was equality. But his outdated POD form created a profoundly unequal result.
2. Joint Tenancy with Right of Survivorship (JTWROS)
Many people, particularly spouses or a parent and a child, own bank accounts jointly. In New York, the default for joint accounts is that they include a “right of survivorship.” This means that when one owner dies, the surviving owner automatically absorbs the deceased owner’s share and becomes the sole owner of the entire account. This transfer happens by operation of law, instantly upon death. The funds are not part of the deceased owner’s probate estate and are not subject to the terms of their will.
This is often used for convenience—an aging parent adding a child to an account to help pay bills. But that convenience comes with a significant legal consequence. That child may inherit the entire account, regardless of what the parent’s will states about dividing assets among all children.
3. Accounts Titled in the Name of a Trust
A properly funded living trust is another common way to avoid probate. If you create a revocable trust and retitle your bank account into the name of that trust, the account is no longer owned by you personally. It is owned by the trust. Consequently, your will—which governs your personal property—has no power over it. The distribution of that account is instead governed by the terms you laid out in the trust document. This is an intentional strategy, but it demonstrates the same principle: ownership and titling are paramount.
Stewardship Requires a Coordinated Plan
The problem is rarely a faulty will. The problem is an uncoordinated plan. People create a will expressing their deepest wishes for their legacy, but they fail to align their asset ownership with those wishes. Bank accounts, retirement plans, and life insurance policies all have their own beneficiary forms that can silently contradict the will.
This disconnect is where families fall apart. What was meant to be a legacy of provision becomes a source of resentment and, too often, litigation. The executor is placed in an impossible position, legally bound to follow the will but powerless over assets passing outside of it. The beneficiaries who receive less than they expected feel cheated, and relationships are permanently damaged.
Good stewardship is deliberate. It requires a review of not just your will, but of every significant asset you own. We must check the deed on your house, the beneficiary forms for your IRA, and the signature cards for your bank accounts. Each must be aligned to serve a single, unified purpose—the one you carefully laid out in your estate plan.
A will is essential. But it is only one tool. To truly protect your family and preserve your legacy, you must ensure that all your financial instruments are working in concert, not at cross-purposes.
The first step toward this alignment is a clear audit of where you stand today. We invite you to gather the account statements for your primary bank and brokerage accounts and schedule a review with our firm. Together, we can examine the current titling and beneficiary designations to ensure they match the intentions of your will, not contradict them.
