Brief Description: Disposing of nonprobate assets under will.

Sponsors: By Representatives Lantz, Serben and Rodne.

House Committee on Judiciary
Senate Committee on Judiciary

Background:

Nonprobate assets are rights and interests that, upon the person's death, pass to a named beneficiary under a written instrument other than the person's will. Nonprobate assets include things like joint bank accounts with right of survivorship and individual retirement accounts. Generally, the person names the beneficiary in the document creating the nonprobate asset.

Even if a beneficiary is named in the document related to the nonprobate asset, the owner of the asset can later change the beneficiary in his or her will without having to change the original document. In that case, the will controls regardless of the prior designation.

If the person later changes the beneficiary again after the date of the will, then the will no longer controls. If the person later revokes that new beneficiary, the prior will does not control. The statute does not specify how the nonprobate asset is treated under those circumstances when the latest beneficiary is revoked and there is no other designation.

When disposing of nonprobate assets, a financial institution or other third party may rely on the beneficiary designated in the document creating the nonprobate asset, unless the financial institution or third party has actual knowledge of a beneficiary under a will.

Summary:

Where there has been a beneficiary designated in a will that is later revoked by a new designation, which is also later revoked, the nonprobate asset is treated as any other general asset of the owner's estate, absent some other provision controlling the disposition of the asset.

The executor of the estate may rely on information provided to him or her by the financial institution when determining who is entitled to the asset.

Votes on Final Passage:

House   98   0
Senate   47   0

Effective: June 7, 2006