Did you know that your Will doesn’t actually cover all your assets? In fact, most of your assets may be distributed completely outside of your Will.

At Herbie, we help you understand how your assets will be distributed by breaking them into three buckets.

• Bucket 1 – Assets you own individually, without a beneficiary designation. These fall under your Will.
• Bucket 2 – Assets with a beneficiary designation. These will be distributed outside of your Will.
• Bucket 3 – Assets you own jointly with someone else, with survivorship rights. These assets pass automatically to the joint owner, also outside of your Will.

In sum, only Bucket 1 assets pass under your Will.

Surprised? Let’s break it down step by step so you can see where your assets fall. And since Bucket 1 is just what’s left over after reviewing Buckets 2 and 3, we’ll come back to that one last.

Bucket 2: Assets with a Beneficiary Designation

Many types of assets are governed by a contract with a financial institution like a bank. In these contracts, the bank includes terms about a beneficiary designation. This means: who will inherit the account if you pass away?

Key assets include:

• Bank accounts
• Retirement accounts, including a 401(k) or IRA
• Insurance policies
• Annuities

When you open these accounts (or create a life insurance policy), you’ll typically be asked to name a beneficiary—the person who will inherit the asset when you pass away.

Why this matters:

• Beneficiary designations override your Will. If you name John as the beneficiary in your Will but Jane as the beneficiary with the bank, Jane gets the asset.
• If you don’t name a beneficiary, the Terms and Conditions of your agreement with the bank will dictate the outcome. This means the asset may be distributed in a way that doesn’t align with your wishes.

Staying updated is key. With Herbie, we help you keep track of your beneficiary designations regularly to avoid any surprises.

Bucket 3: Jointly Owned Assets With Survivorship Rights

If you own something jointly with someone else—like a house or a bank account—it likely won’t be covered by your Will.

Here’s how it works:

• Joint assets with “Right of Survivorship” pass automatically to the other owner when you die.
• This is common for married couples who own property together or share bank accounts.

Example:

• You and your spouse buy a house as joint tenants (check your Deed for terms like “JTWROS” or “Joint Tenants With Right of Survivorship”).
• When one spouse passes away, the house automatically becomes owned 100% by the surviving spouse.
• Even if your Will says your interest in your house goes to someone else, the Deed declaring the property as JTWROS property will control.

What happens after the joint tenant dies?

After the first owner dies, the asset is now a sole asset, falling under one of the other Buckets. For example:

• A house becomes a Bucket 1 asset and will pass under the surviving owner’s Will.
• A bank account becomes a Bucket 2 asset. The surviving owner can now name a new beneficiary through a beneficiary designation.

Bucket 1: Assets You Own Individually, Without a Beneficiary Designation

Now we get to the remainder: the assets that are covered by your Will—often referred to as Probate Assets.

These include:

• Your home and your personal property inside your home, your cars, and other tangible property.
• Accounts where you forgot or chose to not name a beneficiary.

These assets get transferred through your Will. But how does it happen? Your Executor (the person you name in your Will) typically needs to go through a court process called Probate.

Why Do People Avoid Bucket 1?

Probate can be:

• Time-consuming.  It can take months or even years.
• Costly. Lawyers and court fees add up.
• Public.  Probate records are often public, meaning less privacy for your family.

This is why, when possible and reasonable to do, many people take advantage of beneficiary designations (Bucket 2) or joint ownership (Bucket 3) to keep their assets out of Probate.

Making Sense of It All

Understanding the three buckets helps you visualize how your assets will be distributed—and where gaps might exist.

At Herbie, we make this process easy:

• We’ll help you identify which “buckets” your assets fall into.
• You’ll get tools to review and update beneficiary designations regularly.
• We’ll guide you through creating a clear plan that reflects your wishes.

Remember: Your Will is only part of your estate plan. By understanding how all your assets flow—across all three buckets—you can ensure everything is taken care of smoothly and efficiently.

Ready to get started? Herbie is here to help.