A client came to our Manhattan office last month distraught. Her father had recently passed, and she was the sole heir and executor named in his will. But as we reviewed his finances, she was shocked to discover his largest asset—a seven-figure brokerage account—was not governed by the will at all. Instead, it was designated to pass directly to a distant relative she barely knew. Her father had filled out a beneficiary form twenty years ago and never updated it.
This is a situation my firm sees far too often. Many people believe a will is the final word on their entire estate. In New York, it isn’t. A will only controls assets that go through the probate process in Surrogate’s Court. Much of a person’s wealth often passes to heirs through other, more direct, legal channels. Understanding this distinction is the difference between a deliberate legacy and a costly family dispute.
The Contract That Overrules Your Will
Some of the most common and valuable assets pass by contract, not by will. Think of retirement accounts—like your 401(k) or IRA—and life insurance policies. When you open these accounts, you complete a beneficiary designation form. This form is a legally binding contract between you and the financial institution.
This contract dictates who receives the asset upon your death. It completely supersedes any instructions in your will. You could write a will that leaves everything to your spouse, but if your ex-spouse is still listed as the beneficiary on your life insurance policy from two decades ago, the insurance company is legally obligated to pay the proceeds to your ex-spouse. The will is irrelevant for that asset.
This is why simply writing a will is not enough. True estate stewardship involves a complete review of all assets to ensure that these contractual designations align with your current intentions. Leaving them unexamined is a serious contingency that can undermine your entire plan.
How Property Is Titled Matters
The way you own property—especially real estate and bank accounts—also determines its path. In New York, many married couples own their home as “tenants by the entirety.” This form of ownership has a right of survivorship built in. When one spouse dies, the other automatically becomes the sole owner of the property. The house does not pass through the deceased spouse’s will and is not subject to probate.
A similar principle applies to assets owned as “joint tenants with right of survivorship” (JTWROS). This is common for bank accounts or brokerage accounts co-owned by a parent and child or unmarried partners. Upon the death of one owner, the asset passes directly to the surviving joint owner. The creation of these ownership structures is governed by state law, specifically New York’s Estates, Powers and Trusts Law (EPTL) § 6-2.2, which outlines the rules for joint tenancies.
While this can be a simple way to transfer an asset, it can also create unintended consequences. Adding a child to your bank account as a joint owner for convenience may result in that child inheriting the entire account, regardless of what your will says about dividing your estate equally among all your children.
Trusts and Other Will Substitutes
Finally, assets held within a properly funded trust are not part of your probate estate. A trust is a separate legal entity that holds title to assets for the benefit of your designated beneficiaries. As the creator of the trust, you appoint a trustee—often yourself, initially—to manage the assets according to the rules you establish in the trust document.
When you pass away, the assets in the trust are distributed by your successor trustee according to your instructions. This process is private and avoids the time and expense of Surrogate’s Court. The trust document, not the will, controls the disposition of these assets.
Simpler instruments like “Payable-on-Death” (POD) bank accounts or “Transfer-on-Death” (TOD) brokerage accounts function similarly. They are simple contracts that name a beneficiary to receive the account upon your death, bypassing probate. While useful in certain situations, they lack the flexibility and protective features of a well-drafted trust.
A Coordinated Plan Is Not Optional
A will is a foundational document, but it’s only one piece of a much larger picture. An effective estate plan harmonizes your will, trust documents, beneficiary designations, and property titles into a single, coherent strategy. Without this coordination, you are leaving the fate of your legacy to a patchwork of disconnected and often outdated forms.
A prudent first step is to inventory your major assets and review how each is titled and who is named as the beneficiary. My firm can guide you through this beneficiary audit, helping you identify potential conflicts and ensure your documents accurately reflect your intentions for your family’s future.
