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planning matters

• with Vw law

estate plan asset coordination ENSURING YOUR TESTAMENTARY INTENTION A common misunderstanding about the estate planning process is that all assets will pass in accordance with one’s trust or will. That isn’t the case. Different types of assets pass in different ways and contractual designations can trump one’s trust or will. Thus, it is important to coordinate all of your assets as part of your estate planning process. In the event that you specifically want something to pass differently than as provided by the trust or will, you should create clear documentation of any differences. Asset coordination can prevent trust and estate disputes after death. Clear documentation of testamentary intentions can help your beneficiaries establish what you intended to do in the event that someone took advantage of you during a final illness or incapacity. Assets transfer in various ways at death. Assets can pass through a probate process. Probate requires a filing with a court, presenting your will and asking the court to direct that assets be distributed in accordance with your will. Assets can pass by operation of law.

For example, if you title an asset in joint tenancy, upon your death, the asset will pass to the joint tenant by operation of law. Assets can also pass by contractual designation. Creation of a trust and titling assets in trust results in contractual transfers. When you name a mary e. vandenack beneficiary of a life insurance policy, annuity, or IRA, the asset passes contractually. As part of preparing an estate plan, you should compile a detailed list of all of your assets, including the current titling and beneficiary designations. When compiling this list, consider all real estate, investment accounts, your home, life insurance, annuities, stock in a closely held company, executive compensation plans, benefits payable under an employment agreement and unique assets. Assets that typically pass outside of your trust or will include IRAs, retirement accounts, life insurance, business ownership agreements and annuities. In many states real estate can be passed pursuant to a transfer-on-death deed and investment accounts can be passed via a transfer-on-death designation. For those assets that can pass by contractual designation, it is important to consider whether that is desirable. The correct answer depends on a variety of factors. The most important factor is the best way to achieve your estate planning objectives. Additional considerations may include probate avoidance, estate tax issues and income tax issues. For any estate that consists of a variety of assets that pass by beneficiary designation, consideration should be given to whether some of the assets should be directed to the trust and distributed through that vehicle. One advantage of a trust in this regard is that the trust can cover all of the distribution issues in one convenient place. For example, the trust can specify who receives assets in the event a beneficiary predeceases you. This cannot always be accomplished in beneficiary designations but even if it can, you must remember to update and change all beneficiary designations when changes to your testamentary plans occur. Detailed asset coordination is crucial to a good estate plan. Coordinating various estate planning advisors so that everyone is on the same page is extremely beneficial.

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mquarterly • SPrING 2018

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metroMAGAZINE’s mQUARTERLY SPRING 2018 Issue  

metroMAGAZINE/mQUARTERLY presents metroMAGAZINE/mQUARTERLY’s SPRING 2018 issue online now! metroMAGAZINE/mQUARTERLY is published quarterly b...

metroMAGAZINE’s mQUARTERLY SPRING 2018 Issue  

metroMAGAZINE/mQUARTERLY presents metroMAGAZINE/mQUARTERLY’s SPRING 2018 issue online now! metroMAGAZINE/mQUARTERLY is published quarterly b...

Profile for metmago