In this case, we don’t mean your budget, we mean after you’re gone. No one likes to think about their own demise, but we’ve seen too many cases where a dearly departed’s funds or other assets don’t end up going where they intended. That’s even more true today, with the rising incidence of divorce, remarriage, blended families, etc.

At least once a year, you should review all your life insurance policies, IRAs, 401k’s, annuities, bank accounts, etc. to confirm who the stated beneficiaries are, and update them as needed. This isn’t exactly a task you look forward to, but pick a time when you’ll remember to do it. We suggest at tax time, but your birthday, anniversary, or perhaps a certain holiday will do, as long as you pick something that will remind you to dig in each year.

Some securities accounts don’t make it easy to list who you really want as beneficiaries (especially if there are more than one, or you want to name contingent beneficiaries), but you have the right to name whomever you like, so be firm.

There are also designations you can place on certain documents which can help assets go directly to the intended recipients without going through probate or being named in your will. For example, you can place a “Payable on Death” (POD) designation on most bank and securities accounts. The money is still yours and completely under your control during your lifetime, but then goes directly to the named recipient, usually requiring simply a death certificate and positive identification to complete the transfer.

Deeds to real estate have a similar device called “Transfer on Death” (TOD) which works the same way. Again, the real estate is totally under your control during your lifetime. You’ll need to work with an attorney or title agency to put one of these in place.

Both PODs and TODs may be changed any time you like if you change your mind. While these designations will bypass probate and simplify the transfer process, they do NOT remove the assets from your estate, which may be subject to filing requirements if it exceeds a certain amount (as of January 2018, $11.2 million).

We would be happy to talk with you if you would like to do any estate planning or have further questions about some of the ideas we’re presented. Feel free to get in touch with us any time!

Neilley & Co. CPAs Inc.

The information above is intended for general education and awareness only, and should not be constructed as tax or legal advice.