Updated: May 21
If you have set up a 401K, a life insurance policy, and/or an IRA account, how do these affect with your Last Will and Testament? It helps to understand what type of property you Will deposes of upon your death.
What Property Does Your Will Distribute Upon Death?
Your Will only disposes of the property that is under your name when you pass away. For most people, the property they own under their name is usually their car(s), house, bank accounts and the personal property inside of their house.
If you have set up a 401K, life insurance policy and/or an IRA account, you have likely already decided who will benefit from those accounts when you pass away. The person who benefits from the accounts is called the "beneficiary."
When you pass away, with or without a Will, the beneficiary of your 401K, life insurance policy and/or IRA account will receive the funds from those accounts right away.
So, if you have set up at 401K, life insurance policy and/or an IRA account, these will not affect your Will at all. However it's still very important that you prepared you Will since you still need to think about who you would like to transfer your personal property to.