What can I do to Make My Estate Pass Smoothly?

Probate does not have to be a nightmare.

After you die, you will not be facing the settling of your estate.

But your loved ones will!

To make matters worse, they will already be grieving your loss.

Consequently, do not give them more stress by leaving your estate a mess.

According to a recent Tupelo (MS) Daily Journal article titled “A simple way to simplify estate planning," properly utilizing your beneficiary designations will help make probate simpler.

What is the purpose of a beneficiary designation?

It allows a given asset to pass directly to the named beneficiary rather than being include in a potentially long probate proceeding.

What assets typically have a designated beneficiary?

These include IRAs, 401ks, annuities, life insurance policies, pay-on-death accounts, transfer-on-death accounts, stock options, and executive deferred compensation plans.

In fact, in Kansas and Missouri, you can designate nearly everything to pass by some form of beneficiary designation with the exception of tangible personal property like furniture, jewelry, and firearms. 

How do you make your beneficiary designations work for you?

Name beneficiaries.

If an asset permits a beneficiary designation as an option, use it.

What happens if you do not?

The assets may be caught up in probate.

The result?

It could cost you in more legal fees, and delays.

Name contingent beneficiaries.

There is always a possibility for your primary beneficiary may die before or when you do.

What should you do?

You should name a contingent beneficiary.

This could be another family member or even a charity.

By naming a contingent, you will still have a say as to where the funds end up.

Update your designations.

Life happens and things change.

Be sure to review and update your beneficiary designations.

Any time there’s a birth, adoption, death, marriage or divorce, you should review your accounts and polices.

Read the instructions.

Do not sign blindly.

Each form may have different rules and guidelines.

Align the designations with your will and trusts.

What happens if you do not?

The probate proceeding could be delayed and assets may not end up where you intended.

Work with an experienced estate planning attorney.

Estate planning law is complex.

For example, do not name a trust as a beneficiary without speaking to your estate planning attorney.

It could have negative tax consequences.

Understand the tax consequences.

Why?

Not all assets have the same tax consequences or benefits.

Remember, a will or trust does not overrule a beneficiary designation on a given asset.

Beneficiary designations are great unless they are mishandled.

They deserve your full attention.

Reference: Tupelo Daily Journal (November 2, 2018) “A simple way to simplify estate planning”