Testators revising or creating estate plans have their own unique goals. Some people want to leave resources for their children, while others skip a generation to leave assets for their grandchildren. Others might prioritize charitable organizations as their main beneficiaries.
However, one common priority when estate planning is a desire to bypass probate oversight as much as possible. Resources that pass through probate can lead to estate taxes and are vulnerable to creditor claims or Medicaid estate recovery efforts.
There are a variety of tools that can help people plan to keep their most valuable property out of probate court. Those with financial accounts, ranging from investment funds to retirement savings accounts, can use specialized documents to transfer those funds outside of probate court.
Beneficiaries can inherit accounts directly
With appropriate prior planning, testators can arrange for their selected beneficiaries to inherit financial accounts without waiting for the finalization of estate administration. They do not need to share access to or control over the account during their lifetime or transfer it to a trust.
A beneficiary designation submitted to a financial advisor or bank can facilitate the prompt transfer of ownership to a specific beneficiary after the current account owner dies. The chosen beneficiary can assume ownership of the account after the current owner dies by presenting identification and documentation.
Beneficiary designations generally take priority over the terms included in wills. It is therefore critical for individuals to ensure that they update their beneficiary designations if their testamentary intentions or relationships change.
Reviewing an inventory of assets can help people identify estate planning strategies that can work for their goals and resources. Beneficiary designation paperwork is an efficient means of keeping financial resources out of probate court.