New Year’s resolutions are likely on the minds of many California residents at this time of the year. While losing weight and spending less may first come to mind, this may be the ideal time to resolve to revisit estate plans for wills and trusts. A lot of changes can occur during 12 months, many of which may affect estate planning decisions. Events that can prompt changes to beneficiary designations include relocation, marriage and divorce. Birth, adoption and disability may also signal the need for review.
Failure to audit estate planning documents on an annual basis may result in assets being passed to unintended beneficiaries. In too many cases, issues arise during asset transfers after the demise of a close family member. Lack of knowledge about probate and estate administration laws can lead to unintended consequences. Legal counsel can guide individuals through the complicated beneficiary designation guidelines relative to different types of assets.
In most cases, insurance and retirement funds default to a spouse. If a person wants to designate another beneficiary such as a child or grandchild, a waiver may have to be signed by his or her current spouse. Such information is vital when beneficiaries are designated. To avoid family members ending up in court over assets, beneficiaries must be properly documented, and instructions must be explicit. This is especially true for blended families or couples who are not married.
Some assets such as traditional brokerage accounts cannot be designated, and it may be wise to place a Transfer on Death (TOD) registration on them. In the event of the death of both spouses, a brokerage account that is a joint registration will be passed on to designated beneficiaries. There will always be uncertainties, and an experienced California estate planning attorney can help with these tasks and also with designating secondary beneficiaries in the event of the death of a primary beneficiary. With the help of an attorney, revising wills and trusts can form part of anybody’s New Year’s resolutions.
Source: arkcity.net, “Resolve to review and update designations“, Clint Combs, Dec. 8, 2015