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Titling of Assets and Beneficiary Check

| March 21, 2017

Just this week I read a story about a widow who was taken to court by her step-son over the probate of her late husband’s estate. Because the IRA custodian couldn’t find the beneficiary form, the IRA went through probate by default and was subject to a legal battle. In the end, this widow was forced to pay her step-son over $100,000 out of the IRA, but the really surprising part was that she had found out she had to pay income taxes on that $100,000 at tax time. Ouch!

Every year during our Life Planning Reviews, we take a look at the titling of assets and beneficiaries and list these out for the families we work with for this exact reason—to find the holes before someone steps in one. This story did, however, challenge me to review my own family’s beneficiaries and titling. Boy was I the cobbler without shoes for my family. There was a life insurance policy taken out in the dark ages that did not have a record of a beneficiary. Then I found two other accounts that did not have a record of a beneficiary. Then, there was the individual account without a TOD registration—the family would not be happy to have to take this account through probate.

There is so much truth in the old adage “the devil’s in the details.” We can each spend a lot of time and money setting up the perfect estate plan—one that should protect and pass our wealth and our legacy; one that should avoid probate and be kept private. However - and this is a big however -, it isn’t truly and effectively set up until you have re-titled assets and renamed your beneficiaries to fund your estate plan. Too many people (in fact, most people) skip this step entirely. It isn’t a difficult task to do, a bit time consuming perhaps, but most of the time it is left up to you to do—not your attorney as most would believe.

So here is your next 21 day challenge:

  1. List out everything you own-businesses, real estate, investment and bank accounts, life insurance, oil & gas interests, retirement accounts and stock options and anything else.
  2. Find out how each asset is titled. Call the company when it is applicable to make sure your records align with theirs.
  3. Take a mile high view to see whether your titling aligns with your estate plan. For example, a JTWROS (joint with rights of survivorship) account will not fund a trust created by your estate nor will it be part of a living trust if one is created.

Or…here is another option…give us a call and let us do the heavy lifting. After all, that is what we do—help families live Life on purpose!