A Checklist for Passing on Assets to Beneficiaries
Maybe because it isn’t pleasant to consider our own mortality, it is oftentimes too easy to delay the creation and maintenance of our estate plans. Nevertheless, establishing your final wishes and intentions in a clearly stated and understood way through the legal documentation found in an estate plan is the best way to make certain your assets are dispersed as you intend.
Your estate is your legacy. Keeping your important estate planning documents up to date and in good order is a gift that will save your heirs from frustration and hardship at the time of your passing or incapacitation.
Here is a helpful checklist to ensure your estate planning process is efficient and effective.
Broad Estate Plan Considerations
- Audit Provisions Surrounding your Spouse, Dependents, & Financial Commitments
Requirements may vary from state to state and can even change from year to year regarding estate taxes and gifts. Some asset allocation decisions will also have greater flexibility than others so it is important to know whether or not your intentions are feasible. Careful planning is important for the conservation of your assets and to minimize the effects of taxes.
- Think About the Age of an Expected Beneficiary
Minor children and beneficiaries with disabilities will likely require extra trust arrangements and/or special guardianship provisions to be included in your estate plan to ensure proper disbursement of assets. Specialized trusts can be used to leave assets to young children or grandchildren in advance without allowing immediate access.
- Contingencies for Unexpected Possibilities
An example would be if an heir is not able to receive the inheritance or is unwilling to do so, you should establish how those assets will be distributed as an alternative. If a beneficiary is unable to receive an asset and no contingent beneficiary is named, there will be no instructions regarding the handling of the asset. Failing to identify a contingent beneficiary can lead to significant problems within an estate plan.
- Consider any Philanthropic Intentions
Probably the most direct method would be to make donations of assets directly to any favored charitable organizations but you can go beyond that through the use of trusts and even the creation of a foundation. There may be tax advantages and other benefits through the use of specialized trusts that will allow you to satisfy multiple goals as you provide for both your heirs and any preferred charities or organizations.
Specific Estate Plan Considerations
- Business Ownership & Shares
If you own or are a partner in a business, decide which of your heirs may be the most able or willing to take on responsibility for the business as well as discuss potential succession concerns with existing business partners or co-owners. Have you considered providing for essential employees as well as family members? Your estate planning attorney can assist you in the establishment of management succession plans, buy/sell agreements, and family limited partnerships to assure your business continuation and to engage surviving heirs.
- Investment Portfolio for Efficient Taxable Accounts
Establish whether or not your intended heirs will be able to manage your investments on their own without professional financial guidance. It may be beneficial to consider designating control to a qualified individual or organization able to manage your fiduciary responsibilities.
- Retirement Plan Assets
Ensure your retirement plan is in alignment with your estate plan by reviewing beneficiary designations to make certain they are both consistent with your intentions. You may wish to consider weighing the potential benefits of converting a traditional account to a Roth account or rolling employer-sponsored assets into IRAs for beneficiaries. Always carefully assess any tax implications of any distribution method with your financial advisor and estate planning attorney.
- Real Estate – Private Residences or Vacation Properties
Have you decided whether you would like heirs to share the use of a property or receive a cash equivalent of a property’s value? It is important to think about how recipients will be able to manage the costs of ownership, either individually or collectively, and if done collectively – how could someone leave a partnership you have set up.
- Personal Property of Sentimental or Financial Value
Speaking with heirs about the distribution of unique or sentimental items is one of the best ways to determine who might have a special interest. For personal property that may carry significant financial value, you should have items professionally assessed for its current worth to help you decide its recipient. Finally, make sure your executor has access and can locate any necessary estate documents that may be stored in safes or locked deposit boxes.
Safeguard Your Beneficiaries with an Estate Planning Attorney
A comprehensive and detailed estate plan is meant to clearly define your intentions following your death or incapacitation so that others may completely understand your wishes. You may even require multiple document types to ensure your objectives are accomplished. This is no easy feat.
While an estate plan may be arranged without legal help, this is no easy feat. It is recommended to discuss your intentions with and have all legal documentation drafted by an experienced estate planning attorney to ensure every eventuality or ambition is addressed. Call or contact online the estate planning experts at Bridge Law today to learn more about estate planning and how you could benefit.