In Huguette Clark's wills she included lots (and lots) of money, a Monet "Water Lilies" painting, her Santa Barbara, CA estate, and her doll collection. Based on this wide range of items, it would seem like a person can include nearly anything in her will. This is pretty much the case…but not entirely. There are certain types of property that you can include in your will, and certain types of property that you can't include in your will. Welcome to today's installment in our Wills Week series.
There are 5 main types of property that can be included in a will.
1. Real property. Real property, as opposed to personal property, includes property such as real estate (houses and apartments, time-shares), land, and buildings.
2. Cash. Not just the cold hard kind, the category of cash can including money in checking accounts, savings accounts, and money market accounts, in addition to the bills hidden in the mattress.
3. Intangible personal property. Intangible personal property makes the jump from things you own that you can hold in your hand or touch (a house, a doll collection) to things you own that exist pretty much as ideas, such as stocks, bonds, LLCs, and other forms of business ownership. Also included in this category is intellectual property, like royalties, patents, and copyrights.
4. Personal property. This is the stuff you own that you can hold in your hand. This category of property includes valuable objects like cars, artwork, jewelry, and furniture. Or a doll collection.
5. Residuary estate. Your residuary estate refers to any assets that you don't specifically leave to anyone. You can name a beneficiary to your residuary estate, known as the “residuary beneficiary,” and this person will inherit all your remaining assets that haven't been specifically left to other beneficiaries.
Seems to cover everything, right? Nope. There are certain things you cannot include in a will. The things you can't include in your will generally include things you don't own (well, duh) or things you don't own in their entirety (i.e., things you own jointly with someone else), and things that already have a named beneficiary. Here are some examples:
• Your will can't include property that is held in joint tenancy (meaning you own it equally with someone else), such as a house that you own equally with your spouse. Property held in joint tenancy will automatically transfer to the surviving owner, which means you can't leave it to anyone else.
• Any trusts, retirement plans, or insurance policies that already have a beneficiary, and any stocks or bonds for which a beneficiary has already been named can't be included in your will, since you've already named a beneficiary for those items.
And now we come to the topic of digital property. We're talking about your email account, and your Facebook, Twitter, Pinterest, Instagram, personal blogs, and World of Warcraft accounts. While many people consider digital accounts to be property, the law has not yet caught up with this reality. According to those Terms of Service agreements most of us never read, most online companies are legally forbidden from giving the content of your account or access to your account to someone else. In some states (CT, RI IN, ID, OK) you can include login and password information in your will, and your executor will be able to access those accounts. In other states, even if you include the information in your will, your executor won't be able to access your accounts. This is a good reason to write down and store your digital accounts information somewhere safe so that your family can easily access and close your accounts.
If you are writing your will, we'd like to congratulate you. And we'd also like to suggest that if you have any complicated or tricky assets, or if there's anything you're unsure of, you consult a licensed estate attorney in your state. All of this stuff his highly legislated and laws vary from state to state. We'd hate to see you end up in a situation like Ms. Clark's.