Lineweaver Financial Group
Estate Planning Tips
Trying to deal and cope with a loss of a loved one is extremely challenging and emotionally draining in itself. However, when you add the handling of the estate and all that can come with it, it can very well be too much for someone to handle during such a tough time in their lives. Hopefully after reading this article, the handling of the estate process should be much simpler and easier.
Titling of accounts
Arguably one of the most important things you can do in advance is to ensure all of your accounts are titled properly. If you are married, it usually makes sense to have all of your bank accounts held as “Joint tenants with rights of survivorship” with your spouse. This means, that if one spouse passes away, the bank account would then be held in the surviving spouse’s name to avoid probate. In addition to having the account held jointly, you can also add a “Transfer on Death” (TOD) or “Payable on Death” (POD). If something happened to both you and your spouse, those accounts would then pass on to your TOD or POD (i.e., your children) and also avoid probate. Any non-retirement account (i.e., brokerage accounts, bank accounts, etc.) should be titled either jointly with a TOD or POD, or both.
When it comes to any life insurance and retirement accounts, such as deferred compensation, DROP, IRAs, etc., you ALWAYS want to ensure you have both primary and contingent beneficiaries! This again will avoid probate and ensure your assets are going to go to the proper people when you pass away. It is very simple to update your beneficiaries and also important to know how your accounts are titled. Too many times, we find out too late that a few accounts were missed or not titled properly; and it creates more headaches and also costs more money to get the assets to the appropriate people.
In addition to titling all of your accounts properly, it is important to have your legal documents updated and in force prior to when a life-changing event happens. These would include your Wills and Powers of Attorney. Everyone should have a Will, as this will distribute any remaining property that has to go through probate. It is important to remember that all of the accounts mentioned above would avoid going through probate and also avoid passing to your Will if they were titled properly. However, anything remaining would then go through probate; and your Will would distribute the assets accordingly.
You should also make sure both you and your spouse have a Durable Power of Attorney and Health Care Power of Attorney established. These become important in times where one of you is deemed incapacitated or incompetent. In most cases, spouses make each other their powers of attorney so they can make the appropriate decisions on their spouse’s behalf. It can, however, be any one of your choosing; but it’s very important that it is a well- trusted and well-known individual, as this title gives them a lot of control.
Some people want to take their legal documents a step further and create a trust. Simply put, a trust can allow you to “control your assets from the grave” and also ensure your assets stay in your bloodline. This would also avoid probate expenses. Trusts can sometimes be relatively expensive to set up, so it’s important to understand what they do, and be sure that the cost justifies what you are trying to accomplish.
In summary, doing the above steps can help make the loss of a loved one less stressful and less of a burden when trying to settle the estate and final affairs. It is also important to communicate your wishes with your spouse or other loved ones, and be sure everyone is on the same page. Also, make sure you know where your important documents are held, and that they are in a secure place.
No one likes to talk about death, but none of us know what the future may hold; so it’s important to be prepared. If you have further questions on any of the topics discussed, feel free to give us a call.
Lineweaver Financial Group
Securities offered through Triad Advisors, member FINRA/SIPC. Advisory services offered through Lineweaver Wealth Advisors, LLC. Lineweaver Wealth Advisors is not affiliated with Triad Advisors.
This is not intended to be legal advice. Please consult an attorney to address your specific situation.