Do you have a trust? Do you have a POD or TOD on your single or joint accounts? What is a POD or TOD? When was the last time you reviewed your will, or do you even have one? Estate planning is an important tool when you want to make sure your wishes are carried out as you intended. If you’ve ever been through the probate process or had friends talk about the nightmares of improper estate planning, you know how important it is.
For example, a will is a great tool to simply state how you want your assets to be distributed. The probate process is efficient but it is public record and can be contested by anyone that has a stake in your property. Contested wills take time and money and can hurt those that you were trying to protect in the first place.
Trusts are a great way to avoid these problems. They must be drafted by an attorney and you definitely want an estate planning attorney to do them. Discuss what you are trying to achieve with your advisor and see if a trust may be the way to go.
If you don’t have a large estate the POD (Payable on Death for banks) or TOD (Transfer on Death for brokerage accounts) allow your assets with those institutions to pass on directly to the beneficiaries you list quickly and without going through probate. Also, any account with beneficiaries such as IRA’s, Roth IRA’s, annuities, Employer Retirement Plans, and life insurance policies automatically pass to your beneficiaries without going through probate by contract. If this is the only thing in your estate then you may not need a trust.
Make a list of the things important to you and revisit the beneficiaries listed on your accounts. Next look at your net worth and financial plan. What do you want to happen when you are no longer able to control your finances? And although you may not see the value, involve your family in the process.