Overlooked Estate Planning Moves

Copied and Pasted by Daniel Powell

Here are the important issues that frequently are overlooked or dealt with summarily in many estate plans.

Carefully consider all non-probate assets. These assets are excluded from the “probate estate” by state law and avoid the probate process, so their disposition is not covered by the will. (Many of them are included in the gross estate for tax purposes.) Their disposition is covered by law or by contract. These assets include IRAs, employer retirement plans, life insurance, and annuities. Living trusts and all the assets in them also avoid probate.

Most non-probate assets have a beneficiary designation that must be completed. It usually is a section of the account application or contract, or in a separate document. IRAs and 401(k)s are the prime examples. The accounts will be transferred as indicated on the beneficiary designation form. If no one is listed, the account will be transferred to the estate, which for these assets would cause the loss of most tax deferral and would trigger higher income taxes on heirs than necessary.

For each of these non-probate assets, the custodian or account sponsor looks only at the forms in its records. Often, a beneficiary designation form was completed many years ago, perhaps before the owner was married or had children. In the ensuing years, the owner’s marital or family situation could change. Yet, many people forget about their designation forms and do not update them with the estate plan.

The article talks about the topics of estate planning that are often overlooked by people. The entire article can be read HERE