If you are like most people, most of your assets are in retirement accounts, annuities, life insurance policies and pensions, says MD Magazine in its recent article, “Making Sure Your Heirs Get What You Intend.” These accounts require that a beneficiary be named, and those assets go directly to the beneficiary on the death of the owner.
It’s not uncommon after a few years, for a person to forget which beneficiaries they specified for a life insurance policy or pension. There’s no “do-over” after you’re gone, which can lead to considerable confusion and stress. It will also ultimately disappoint your intended heirs. In addition, based on whether and how some other assets are designated in estate planning documents, some states may send the matter to probate. This can be a long and expensive process, since if the estate plan was done right in the first place, it wouldn’t be needed.
To be certain the heirs you intend inherit the assets you intend, remember these points:
- Proper asset ownership and beneficiary designations are the KEY to making sure your family is taken care of.
- Keep track of the beneficiaries you’ve designated for your accounts. If you don’t recall, check with these institutions.
- Don’t rely on cookie-cutter, one-size-fits-all estate planning products. Get a custom plan from an experienced estate planning attorney, even though it may cost a little bit more money.
- Regularly review the beneficiary designations on your financial accounts and those in your will, to be sure they’re in sync and current.
- Create and keep an asset spreadsheet showing asset ownership, who is the named beneficiary, and the value of each asset.
Additionally, talk to your attorney to determine if a trust is a good idea for your specific situation. The primary reason in some cases to have a trust is potential incapacitation. Therefore, a trust can empower trustees to manage your assets without first going to court to get a conservatorship, which can be time-consuming and costly.
A trust can also be way to protect assets from your beneficiaries’ divorces, bankruptcies, and lawsuits. A trustee is appointed to assure that assets are distributed according to specified instructions. This can be a good way to make sure dependent heirs don’t burn through their inheritance too quickly or spend it only on what you have specified. Trusts can also be a smart way to ensure the care of a disabled relative.
An experienced estate planning attorney will help you create an estate plan, which should include a thorough evaluation of all of your assets and updating your beneficiary designations.
To learn more about aligning asset ownership and beneficiary designations, our ongoing updating process, or for more information on other estate planning topics, visit our website today and schedule your consultation!
Reference: MD Magazine (July 25, 2018) “Making Sure Your Heirs Get What You Intend”