We all have heard about the importance of creating an estate plan for the benefit of our loved ones. In creating an estate plan, many people believe that their will is the final say on who gets what accounts after they die. While a will often is the final determination of who receives which assets, simple titling errors can create big headaches for all of those involved. The beneficiaries named on certain assets make the actual determination of where an asset may go even if a will states otherwise.
An estate plan can be frustrated by the way that a person titles individuals as beneficiaries of assets like bank or brokerage accounts. For instance, a mother may wish to have her estate divided equally among her three children upon her passing. However, if the mother names only one child as beneficiary of a savings account, only that child will receive the contents of that account because they were listed as the sole beneficiary. Obviously, that child is free to disperse the contents of the account equally to the other two children. However, the recipient of the asset is not under any legal obligation to do so. This situation can often lead to family problems.
Many people do not understand the implications and importance of titling on their accounts. When reviewing your estate plan, it is important to review who you have listed as a beneficiary on your accounts. Make sure that your wishes are expressed accordingly. In addition, it is also important to update your estate plan following any major life changes. If something has happened to a named beneficiary, be sure to update those accounts so that your wishes are met.
There are a number of titling errors that can come about including naming deceased individuals as beneficiaries, naming one child as beneficiary before others are born, or even naming grown children on custodial accounts that are intended for minor children. Some people may even forget who they have listed as beneficiaries. It is important to recognize some of the errors so that you can catch any potential mistakes before they happen.
Banks have long provided people with payable on death accounts. These types of accounts allow the beneficiary to recover the assets in the account after the death by providing a copy of the death certificate. This can allow the beneficiary to avoid the probate process. The probate process can be very long and involved. Those funds may be needed by loved ones who may not be able to wait on the court to decide where they should go. If no one is named on the account, it then passes to heirs under the will.
If you need help with your estate planning, be sure to contact The Higgins Firm. Our Tennessee estate planning lawyers will help to make sure that your affairs are in order. We would be happy to answer any estate planning questions that you may have. Our goal is to ensure that the estate planning process is as smooth and stress-free as possible.