Estate planning is as complicated as it is important. Some California residents may not realize that the best practice for effective estate planning requires the building of an integrated team of advisers that are appropriately skilled. It is often believed that property can only be transferred through the probate process after death while, in fact, there are several methods to achieve this. Transferring wealth through beneficiary designations is another mechanism, and it will be separate from probate proceedings.
The involvement of the probate court makes the transfer of property more costly, and it is not uncommon for delays to occur. Unfortunately, beneficiary designations are not always done with the thoughtfulness such an important task deserves. In many instances, beneficiaries are decided upon on the spur of the moment and without much thought related to other estate planning details.
It is also vital for benefactors to revisit accounts with designated beneficiaries from time to time. Situations that might prompt audits of documented beneficiaries include divorces and remarriages, and careful planning is required when blended families are formed that involves a beneficiary. Whenever an individual is asked to appoint a beneficiary, the appropriate action would be to consult with advisers and consider it in conjunction with the estate planning goals as a whole.
California residents who want to ensure their assets are distributed in the most cost-effective manner upon their deaths may benefit from consulting with an attorney who is experienced in the field of probate and estate administration. A lawyer can explain the probate process and may have resources, including financial advisers and other professionals, to form part of a cohesive advisory team. Existing and newly acquired assets can be discussed with the attorney and other members of the advisory team to determine the appropriate manner in which to manage asset ownership and beneficiary designation to coordinate with the estate plan of the client.
Source: Forbes, “Your Will And Trusts Aren’t Enough: Using Beneficiary Designations As An Estate Plan“, Jamie Hopkins, Accessed on Nov. 25, 2015