Estate and Beneficiary Planning

Included within the scope of estate and beneficiary planning are several issues that extend beyond just whether or not you have a will. Here are some important items to consider:

An individual who dies without a valid will is referred to as ‘intestate’. Accordingly, state law will determine who can make decisions regarding the disposition of the decedent’s assets. It’s important to have a will with a designated executor or administrator so that your wishes will be honored.

If assets owned are distributed solely via a will, they will be under the jurisdiction of the local Probate Court. The executor or other designee is required to make a periodic accounting to the Probate Court. This is typically done by an attorney and is of public record as well as subject to legal fees.

Assets having beneficiary designations, such as life insurance policies and retirement accounts like IRAs and 401(k)s, bypass probate and go directly to those beneficiaries. Other means of designating beneficiaries include titling bank and brokerage accounts as POD (payable on death) or TOD (transfer on death). Joint accounts can serve the same purpose, but one must be cognizant of the gift tax laws.

Additionally a living trust can be created to take title to your home and other assets not subject to beneficiary designations. Assets in a trust avoid the probate court process. Making sure the titling of assets in the trust is complete is called ‘funding’ the trust.

Review Periodically

Lastly, beneficiary designations should be reviewed periodically, especially after the death or divorce of a beneficiary or other changes in circumstances. As long as you’re alive, beneficiaries of life insurance policies, retirement plans, etc. can be changed, but once you’re gone everything is fixed in stone. Plan accordingly.

We hope you will seek qualified assistance if you feel that you or a loved one may lack some of the elements mentioned here. We are always available to help, including making referrals to other professionals with whom we have personal experience and trust.

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