Navigating Life’s Legal Transitions

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Point of Law: Do I need an Estate Plan?

by | Sep 20, 2020 | Estate Planning, Firm News

By Attorney Ora Schwartzberg

Here is a nitty-gritty, detail of life that no one wants to talk about….

Part of getting your finances in order should include planning for your ultimate demise.  Despite all our best efforts—-none of us is going to get out of here alive, NONE OF US!

Just think about this scenario—a parent passes away leaving behind a sizable mess.  There may be a will, as barebones as it gets (often, extremely vague and decidedly unhelpful).  There is no life insurance, little to no savings, some retirement accounts and a house.  Everything lands on someone’s shoulders.  There could be thousands of dollars in expenses from funeral, home repairs, storage fees, attorney, appraiser and court fees. This could take many months, if not years to sort out.

If you have loved ones—-don’t do this to them! Make solid plans for what you want to happen upon your death and communicate this to everyone involved.

Here are a few ideas of what you might want to do now, even if you already have a will: 

Name a Beneficiary. The probate process only applies to those accounts or other property that are in your name at your death. By naming a beneficiary, these accounts or other property will be transferred, at the time of death, to the named individual, “by operation of law”, without any court involvement. Common beneficiary designation assets include:  

  • Life insurance
  • Annuities
  • Retirement plans
  • Business interests

Create and Fund a Revocable Living Trust (RLT). Once the RLT has been created, and you have properly transferred the ownership of your accounts and property to the RLT by re-titling them into the name of the trust, you remain in charge of all legal decisions until your death as the trustee, and you retain the enjoyment of those accounts and property as the current beneficiary. After your death, your named successor trustee will manage and distribute your assets – according to your wishes and without court involvement

Own Property Jointly. Probate can also be avoided if the property you own is held jointly with a right of survivorship. Just like a beneficiary designation, joint ownership has the effect of automatically transferring the ownership upon your death. Joint ownership can be created with respect to real estate as well as bank and brokerage accounts.

One concern you should have in implementing any of the above suggestions is that the creation of beneficiary designations or joint ownership property could subject the accounts or property to claims asserted by the new joint owner’s creditors. Moreover, this vulnerability begins the moment they are added. This means that your accounts or property could be seized by your new joint owner’s creditors even while you are still alive. 

It would be prudent to work with an experienced estate planning attorney to assist you with these considerations, decisions and especially their implementation.

To learn more, visit our Estate Planning section of the website, or contact us to speak with one of the attorneys.

Attorney Schwartzberg is the founder of Schwartzberg Law and Legacy Strategies, PLLC in Plymouth, NH.