“Our inherent nature to delay the inevitable can lead the ones we care about into financial chaos. To avoid chaos, careful preparation is needed when it comes to estate planning.”
Estate planning protects families, especially those with young children. It can eliminate stress, expense, and unpleasant consequences that can last for generations. This is the message in an article titled “In the Works: Don’t Wait: Considerations in Estate Planning” from Guidon.
The two most common ways to transfer wealth and property are through a will and beneficiary designations. The use of a will requires probate, which is the process of having the court review the will and “prove” it the last statement made by the deceased. It can be expensive and time-consuming. As a result, many people work with their estate planning attorneys to maximize the assets that have beneficiary and contingent beneficiary designations.
The beneficiary designations can include people, organizations, charities or trusts, or a mix of all of them.
Most of our wealth in this country is transferred through a will. However, it can only transfer property subject to probate. Some examples are real estate, also known as real property, personal property, and account with no beneficiary designation or surviving joint owner. Accounts that are typically transferred by beneficiary designation, include life insurance policies, annuities, pensions, IRAs, and 401(k)s.
Keeping beneficiary designations up to date with changes in your life is very important. Births, deaths, divorces, and marriages are all trigger events that require a look at your estate plan and your beneficiary designations.
Here’s something to keep in mind: beneficiaries are not notified when changes in their status are made. If you take someone who was a beneficiary of an insurance policy, they are not going to get a phone call or an email from the insurance company. People are often worried about the repercussions of changing beneficiary designations or even their wills. Unless you tell people there has been a change, they will not know until you pass.
Speak with an estate planning attorney about your estate plan and how much of your estate distribution is handled by your will and how much by beneficiary designations. There may be newly available options as the result of the new tax law that also requires a review.
Reference: Guidon (July 19, 2018) “In the Works: Don’t Wait: Considerations in Estate Planning”
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The estate planning lawyers of Krause Donovan Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. Our dedicated attorneys will even make house calls if you are unable to come to our office.