Trusts and Estates Blog

Designate Beneficiaries on Certain Assets

male in white shirt completing a blank formThere are many ways in which hiring an estate planning attorney can help you to navigate the often treacherous landscape of estate laws. One in particular is in understanding the necessity of properly designating beneficiaries for all of your accounts. Regardless of how polished your Will might be, or how clearly you have designated and divided your estate among your loved ones, failing to ensure that the right beneficiaries are noted on your retirement and investment account beneficiary designations could critically disrupt your carefully-laid plans.

If you have created a Will or revocable trust, then you are already taking the right step in securing your family’s financial future in the event of your death. However, what many people do not realize is that much of their wealth is tied up in retirement and investment accounts – each with their own rules for distributing those assets when the owner (you) can no longer claim them.

If you own such accounts – as most people do – it is important that you sit down with a qualified estate planning attorney and ensure that your desires that are outlined in your Will are reflected in the beneficiary designations of your accounts.

• Contact your account holders, especially those of accounts that have been established for quite some time, and inquire about the beneficiaries listed.

• Discuss with your lawyer the proper methods for changing beneficiaries to reflect the desires you have laid out in your Will or trust.

• Include Life Insurance accounts, bank/savings accounts, investment portfolios, 401k accounts, or any account that requires a noted beneficiary. Your estate planning attorney can help you identify those accounts.

• Discuss with your lawyer the possibility of additional taxes that may be added to your assets if beneficiaries are not properly noted.

Often, when people do an inventory of their accounts with beneficiaries, they find beneficiaries listed whom they no longer wish to receive part of their estate (for example, ex-spouses). The beneficiary listed on an account will be given the assets within that account, regardless of what is stated in your Will or trust. Essentially, the laws regarding beneficiary designation override those regarding the settlement of a Will or trust. It is, therefore, always a good idea to discuss with your attorney ways in which you can keep your beneficiary designations up-to-date at all times, especially when you cross important milestones such as a new marriage, a divorce, the death of a loved one, or the birth of a child.

The Problems with Hiring a Jack of All Trades for your Estate Planning Needs

4 year old embracing her Mother's neckMany people mistakenly assume that any lawyer can handle any and all of their legal needs. In the same sense that you would not depend on your general practice physician to consult you on a neurological problem, or a autoimmune blood disorder, depending on a generalist attorney to handle your estate planning needs is risky. There are specialists in any field, and in the field of law, estate planning lawyers who are specialists know best how to help you determine the future of your assets and the care of your family in the event of your death.

While a generalist attorney may know how to cover the basics of your estate planning (such as creating a Will or a revocable trust), he or she will most likely not be well-versed in the complicated estate taxes and loopholes that are a large part of estate and tax law. Estate taxes can reduce your assets by as much as 45% or more, and what your lawyer doesn’t know could hurt both you and your family. On the contrary, a qualified estate planning attorney will know ways in which you can avoid hefty taxes, as well as loopholes you can navigate to keep more money in your estate.

Hiring a specialist in estate planning law versus a generalist has other benefits:

• An estate planning attorney has had experience in handling both large and small estates.

• An estate planning attorney can help you find the best exemptions available to you under Federal and state law.

• An estate planning attorney will know how to handle the estate planning process through multiple stages – from drawing up documents such as Wills and trusts to what actions to take after a death and litigation regarding estate planning documents.

• You can rest assured that the most recent estate laws and tax codes will be taken into consideration when your lawyer suggests your best options for the allocation and designation of your assets.

• In an increasingly unstable economy, an estate planning lawyer will know the most recent limits and statutes relating to your investment accounts, savings, and IRAs.

If you would like more information concerning your estate planning options, is a comprehensive online resource for personal wealth management solutions through wills and revocable trusts. Whether your estate planning goals are immediate or long-term, a qualified California estate planning attorney will be able to counsel you on the best options available to you to meet your individual needs.

Basic Estate Planning

Typically, there are numerous goals of estate planning. Three of those goals include:

(1) To reap the maximum benefit from the use and possession of property during the client’s lifetime, (2) to minimize transfer costs and to minimize income, gift, estate and inheritance tax costs during the client’s lifetime and at death; and (3) to ensure the transfer of that property upon death without fighting among beneficiaries while minimizing estate taxes, income taxes, and other transfer costs.

Estate planning cannot be reduced to a purely mechanical process if it is to be successful. In planning an estate, the client should define the results he or she is seeking to accomplish. Any plan developed should reflect the client’s values, philosophy, and attitude toward risk, and especially the needs of intended beneficiaries.

The development of a comprehensive estate plan is complex. Because of the diverse tax, investment, and conservation techniques involved, we cannot over emphasize the use of outside advisors. At a minimum, you need an estate planning lawyer because the implementation of a plan requires compliance with many complex and technical legal requirements and knowledge of the effects of state and federal law. In addition, the use of an accountant, life insurance agent, investment advisor, and a financial planner are virtually always beneficial. In no event should an individual, couple or family with a sizable estate undertake the estate planning process without the use of outside advisors.

Trusts and Estates Blog