"What do you mean I don't get it all? We were married".
I can't begin to tell you how many times I've heard that question. Spouses are often shocked when they realize they aren't entitled to the entire estate just because they are married.
People mistakenly think that because they are married, they receive the entire estate when a spouse passes away.
Unfortunately, a spouse can find themselves having to share a deceased spouse's estate in unanticipated ways.
First, it is important to understand the difference between probate and non-probate assets. Non-probate assets are assets that are jointly owned, have a beneficiary designation or are owned by an entity such as a trust. Bank accounts that are in joint names or that have a payable on death beneficiary listed are examples of non-probate assets.
Probate assets are those that are title solely in the decedent's name and don't have a beneficiary designation. Since these assets don't have an obvious designated post-mortem owner, their ownership needs to be determined.
It's pretty obvious where non-probate assets go after the death of an owner. If it's jointly owned, the surviving joint owner owns it. If the asset has a payable on death or transfer on death beneficiary, that person owns the asset. There may be a couple of hoops to jump through to get the assets in surviving joint owner or beneficiary's name, but we pretty much know at the time of death who owns the asset.
Ownership of probate assets has to be determined and can be affected by a couple of things. This is where the estate plan comes into play. If there is a will, the probate assets will transfer according to the will's testamentary language. On the other hand, if you fail to leave a will, Indiana's intestate laws will control who gets the assets and, under the code provisions, the spouse is going to have to share the estate with the children. That's why it is so important to have a will. If you don't leave instructions, the state is going supply a set.
Finally, since I discussed probate and non-probate assets, it's important to understand that the will only controls probate assets. What that means is if you have your daughter on a checking account with you but your will designates the account be distributed equally to your children, chances are your daughter is going to own the account and the other kids are going to be out of luck.
Make sure you understand how your assets are titled and what, if any, beneficiary designations exist. Understanding how all of your assets is essential to a complete estate plan.