Good Estate Planning – Not Just a Will and a Trust

A good estate plan includes not only a Will and possibly a Living Trust, but also includes a review of beneficiary designations.

It seems obvious that a Will transfers property in your estate.  But what may not be so obvious is that if you have beneficiaries named for bank accounts, brokerage accounts, life insurance policies those would not be part of your estate.  Your will would have no effect on how they are distributed.  The assets in those accounts will pass directly to the named beneficiaries.  This is also true for real estate owned in joint tenancy.  It too is not part your estate.  While this may work exactly as you intend but then it may not. 

For example, a person early in their life may name their parents as beneficiaries.  This is fine at the time since the person might want to provide for the future care of their parents.  But in later years they marry and have children and, if they thought about it, they would want to change the beneficiary designations.

So, beneficiary designations and joint tenancy accounts and real estate in joint tenancy should be considered in evaluating your estate plan.

This is even more important with respect to IRA and 401(k) accounts.  Because these types of accounts have special rules involving withdrawals, extra consideration should be given to the beneficiary designations.

Disclaimer

This is a passive blog and the materials contained herein are provided for informational purposes only. Nothing contained in this blog should be interpreted as a solicitation of business and none of the information contained herein constitutes legal advice. The law is subject to change without notice, and the local laws of your residence may be different from the general information displayed on this blog. You should not rely on the information provided on this blog without first consulting an attorney. Contacting this website does not establish and attorney/client relationship between you and its publisher Christopher W. Matern.

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