Inheritance Planning

When people think about passing on their assets at death, they often think about their Last Will & Testament. However, many assets pass other ways and DO NOT pass pursuant to a will. That said, it is always important to have a will, just in case.

How Assets Pass At Death. There are 3 basic ways assets pass at death. The first two ways avoid the probate process while the third requires probate.

1. Operation of Law. These are assets whose distribution at death is governed by the rules of that asset’s title or designation. With these types of assets and ownership, the asset passes pursuant to the applicable law regardless of what your will requires. When looking to avoid probate, make sure all of your assets that can pass properly by operation of law do so while still reflecting your inheritance choices. Examples:

• Joint Tenants With Right of Survivorship (JTWROS). Asset passes to the survivor of the joint owners.
• Tenants by the Entirety. For married couples, asset passes to the surviving spouse.
• Joint ownership of financial accounts. Asset passes to the survivor of the joint owners.
• Beneficiary Designations. Asset passes to the named beneficiaries.
• TOD Accounts & TOD Deeds. Asset passes to the person named.
• UTMA Accounts. At custodian’s death, the beneficiary does not change. New successor custodian steps in.

2. Trusts. A trust agreement directs to whom, by whom, when, for what, and how much of your assets will be distributed during your lifetime and/or after you pass away. All assets properly titled in the name of a trust avoid probate, passing under the terms of the trust regardless of your will’s requirements.

3. Wills/Intestacy. Wills govern the distribution of everything not distributed in the ways described above. Implementation of a will requires probate.

To learn more about Inheritance Planning or to discuss your planning, please click the links below to schedule a meeting with someone from our team.

Estate Planning for the Sandwich Generation

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