Will Your Estate Plan Create Unintended Problems for Your Heirs?
Do you have a Will? Did you create that Will yourself using documents you downloaded from the internet? If you had a lawyer do the work for you, was that lawyer someone you had done business with before, maybe the attorney who helped you start a business, get a divorce, fight an insurance claim, or close a real estate deal? Did you go to their office and say, “I want a Will,” and then they created one for you?
First off, if you have a Will, no matter how you got it, I want you to know that I’m proud of you for taking a proactive step toward making things easier for those you leave behind when you pass away.
That said, I want to make sure you don’t fall into a trap that ensnares a lot of people who take the do-it-yourself approach to estate planning, or work with general practice attorneys or attorneys who specialize in areas of law other than estate planning.
This trap involves assets.
When people do their own estate planning or they go to see a general practice attorney for just a Will, they don't consider which assets will be part of their probate estate and which ones won’t. They don’t realize that only the assets that fall into their probate estate when they pass away will be distributed according to the terms of their Will.
If you already have a Will, you may think that you’re all set. You might be. And you might not be.
Having a Will doesn't always ensure that your wishes are going to be carried out. The problems happen when you create your Will without knowing what happens to certain assets in certain situations.
Here are two of the most common ways assets can cause problems in an estate plan.
Beneficiary Designations on Accounts
A beneficiary designation on an account causes assets to bypass the probate process and go directly to the beneficiaries named on that account. Beneficiary designations are great to use if you know how they work. They can be useful tools under the right circumstances. However, allowing assets to pass through beneficiary designations might not be the best option for you for a number of reasons. Those reasons depend on your unique family circumstances.
Joint Ownership
If you have joint owners on an account, the assets in those accounts don’t fall into your probate estate after your death; the assets go directly to the joint owner. Many older adults will name a child as a joint owner on a bank account to give that child the ability to pay bills or manage their financial assets if they become incapacitated. However, there’s a catch. Joint owners have survivorship rights. What does that mean in layman’s terms? Upon the death of one account holder, the surviving joint owner may continue to have unrestricted access to the funds, potentially excluding your other heirs from their rightful share.
How do you avoid these problems? The best way is to work with an experienced estate planning firm like Kimbrough Law. We can help you create an estate plan that sidesteps every potential land mine and works exactly as you intended. Your heirs will thank you!
Call Kimbrough Law at 706.850.6910 to schedule a confidential consultation.
