Think Before You List Beneficiaries On Non-Probate Assets
People put a lot of thought into listing their loved ones as beneficiaries of their wills. Some people disinherit their relatives in anger and never get around to writing a new version of the will after they reconcile. Others reread their wills every time they get angry with a family member but never go as far as disinheriting their relatives and signing a new version of the will in the presence of two witnesses. Then there are the people who quietly draft their wills and don’t tell their families about the contents; they spend the rest of their lives imagining the surprise of each of the beneficiaries about how much or how little they inherited. Perhaps you did all of this and then went to an estate planning lawyer, expecting a pat on the back for being so proactive, but when you left your consultation with the lawyer, you felt like a chump, because your family would only get their inheritance, or in the case of your least favorite relatives, their whole lot of nothing, until after probate, which involves enough expenses and enough paperwork to get on everyone’s nerves. Listing beneficiaries on non-probate assets sounds like a quick fix, but like everything else in estate planning, it requires careful thought. For help strategizing about transferring property to your heirs outside of probate, contact a Tampa estate planning lawyer.
What Could Possibly Go Wrong If Someone You Love Inherited Your Bank Account With No Strings Attached?
Non-probate assets are those that go to the designated beneficiaries immediately upon the original owner’s death. Examples include life insurance policies, bank accounts with transfer on death (TOD) provisions, and investment accounts with payable on death (POD) provisions. Trusts are also non-probate assets, but they do not always pay out to the beneficiaries in a lump sum, and the beneficiaries of a trust can begin receiving payments even while the grantor is still alive.
Insurance companies only let you list someone as a beneficiary if the person depends on you financially, and TOD and POD beneficiaries are almost always close relatives of the original account holder. If you want to leave money to someone who is not your spouse or a close blood relative, it is best to make that person a beneficiary of your will, since you can list anyone as a beneficiary of a will. Likewise, a trust is a better option than a TOD beneficiary designation if the heir is too young to legally inherit money or if you are leaving money to an adult heir who could lose his or her disability benefits because of the inheritance or whose financial struggles are such that a windfall would make them worse.
Contact David Toback About Designating Beneficiaries of Non-Probate Assets
A Central Florida estate planning lawyer can help your family inherit property from you without unknowingly walking into a new world of drama. Contact David Toback in Tampa, Florida to set up a consultation.
Source:
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