Planning Ahead: Estate Planning and Beneficiary Designations

After creating an estate plan, it is easy to fall into the trap of thinking that you have now done everything necessary to plan for the future. In many cases, however, people fail to make sure that all beneficiary designations as well as assets are titled in a way to reflect your plans.


It is critical to make sure that these assets are properly titled because when people die, they often have two types of estates: those that must be probated as well as “non-probate” assets.


Not Everything Passes through a Will


Many people overlook the simple details that not all assets a person owns passes by a will. Instead, some assets are not required to pass through the probate process and instead pass in accordance with other means including beneficiary designations, joint titling, and payable on death accounts.


While many people decide to leave everything in their will as well as 401(k) and IRAs to a surviving spouse or child, other people experience much more complex issues when planning how to pass assets.


Common Problems with Beneficiary Designations


Problems with the appointment of beneficiaries often arise after a person’s death. One type of obstacle is if a property is jointly titled with a right of survivorship when a will states that assets must be equally divided.


In these situations, the property will often pass in accordance with the party that is named on the deed. In cases involving payable on death (POD) or transfer on death (TOD) accounts, the terms of these accounts have control over whatever is stated in a will.


Advice to Follow when Designating a Beneficiary


Some of the helpful pieces of advice to follow when designating a beneficiary include:


  • Remember to name a beneficiary for each assets you own. If you fail to name a beneficiary, the asset might be required to proceed through probate or a default party might be named.
  • In many cases, it is a wise idea to name a “back up” in the event that the primary beneficiary passes away before you do.
  • Review your beneficiary designations on a regular basis and update them as needed based on any major life events that occur.
  • Make sure to fully read any beneficiary designation forms before appointing a beneficiary.
  • Whenever you change your will or trust, it is a wise idea to speak with an estate planning attorney about your beneficiary designations.
  • Be cautious about naming your estate as a beneficiary. It is also critical to remain cautious when naming a trust as a beneficiary.
  • Many assets follow unique tax roles, which is why it is often helpful to discuss matters with an experienced tax advisor first who can provide advice regarding your situation.


Speak with an Experienced Estate Planning Lawyer

When considering how your assets will be distributed, it is important the various situations that could potentially arise including both probate and non-probate assets. If you or your loved ones have questions or concerns about the estate planning process, an experienced estate planning lawyer can help greatly. Contact Ettinger Estate Planning today to schedule a free initial consultation.

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