The Musts for Your Estate Plan

Throughout the years, you spend time accumulating bank and brokerage accounts, real estate, retirement accounts, annuities, and other assets, so it is not uncommon to forget to update important information, like who are the beneficiaries and how your assets are titled. Securing your estate in these ways can help to quickly transfer your assets to loved ones, perhaps avoid probate, and even reduce estate taxes.

Specifically, there are two key features that can help you avoid probate and potentially limit taxes for your heirs: joint ownership and naming a “transfer on death” or “payable on death” beneficiary. There are several ways to structure joint ownership, all of which can create varying consequences. The three ways to title a joint account are joint tenancy with rights of survivorship, tenancy by entirety, and tenancy in common. Further, another simple step to help avoid probate is to name someone as a transfer on death beneficiary or payable on death beneficiary. However, there are a couple major drawbacks to designating assets in this way, including that these titled assets override whatever is stated in a will and can incur estate taxes. Ultimately, you should speak with an estate-planning attorney to help meet all of your estate planning goals.

See Estate Planning Must Dos, Fidelity, March 27, 2017.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.