When doing estate planning, it’s important to be aware of the fact that not every asset will necessarily be dealt with by the will. Certain assets may fall outside of a person’s estate.
Assets with beneficiary designations
Insurance policies typically designate individuals as beneficiaries, rather than designating estates as beneficiaries. Likewise, investments such as registered retirement savings plans (RRSPs) and tax free savings accounts (TFSAs) will often list specific beneficiaries. If beneficiaries are listed on an insurance policy, for example, then those beneficiaries will be entitled to the proceeds of the policy upon the insured person’s death, unless there is something in the insured person’s will that specifically overrides the beneficiary designation in the policy.
Jointly held assets
If you hold assets jointly with someone else, then the right of survivorship applies to those assets. With joint ownership, if one co-owner dies, the surviving co-owner automatically becomes the sole owner of the asset in question.
Some assets actually cease to be “owned” by a person upon that person’s death. For example, if someone has a life estate associated with a particular piece of real estate, that person is entitled to live on that property until that person dies. However, once that person dies, the property won’t be dealt with by that person’s estate, but will instead pass on to someone else.