Non-Probate Assets:
Some assets will pass automatically even if a Will or Trust says otherwise. Therefore, it is important to understand how these work so that an Estate Plan can function as intended.
Beneficiary Designations: Some assets are designed to pass through beneficiary designations or payable on death instructions given to banks, insurance companies and other institutions. Common examples include:
• Life Insurance Policies & Annuities
• Bank Accounts, IRAs and 401ks
• Disability and other Health Policies
Beneficiary designations are also part of Estate Planning. They are a simple way to distribute assets but they have limitations:
• There is very little control over timing of distributions;
• There is a limited ability to name contingent beneficiaries which may result in the need for probate which may result in an unintended disinheritance or an uneven distributions; and
• Limited ability to maximize value through tax and other planning.
Strategy for Designations: Many of these disadvantages may be avoided by naming a Trust as a beneficiary. Rather than money or property being paid directly to the beneficiary, it is paid to the Trustee who manages and/or distributes the property according to your wishes.
Joint Tenancy, Life Estates and Transfer on Death Deeds
TODs & beneficiary designations work great but only if you know who will die first that the beneficiaries will have no issues.
Real property may be titled so that ownership transfers by the filing an affidavit of the surviving interest owner after the other owner dies. Property held in this way is not subject to probate. Common examples include:
• Joint Tenancy,
• Life Estate, and
• Transfer on Death Deeds.
Neither a “Joint Tenancy,” “Life Estate” nor a “Transfer on Death Deed” can be modified by a Will or Trust. There a deed or revocation must be filed to effect a change. Read about Wiley’s Mistake
Follow the links to read articles about these types of deeds, their benefits and their drawbacks.
Learn More: 405.340.6554
Attend a Free Workshop:
