When Planning Your Estate
When planning your estate, keep it simple, but not too simple. Consider the following example.
HYPOTHETICAL FACTS: Mom, a widow, has one child named Samuel. Samuel’s wife is Jessica and together Samuel and Jessica have Mom’s only grandchild whose name is Emily. Mom decides to put Samuel on all her bank accounts so they are owned jointly. Mom changes the deed to her house to put Samuel on title so they own her real estate jointly with right of survivorship. Mom names Samuel as the beneficiary on her life insurance and IRA. Mom thinks the plan is great because she knows it will avoid probate. Unfortunately, Mom never consulted an attorney. Thus Mom’s analysis stops there. Mom’s plan may not be so good, after all. Let’s see.
Mom creates a revocable trust and re-titles all her assets into her trust. Her trust leaves all her assets to Samuel in trust for his benefit during his life with remainder to Emily. With this plan, all the problems alluded to above are avoided. And so the moral of the story is…keep it simple but not too simple when planning your estate.
Contributed byMark F. Winn