A blog series from the planning team at Disability Planning Partners, Inc.
Sally hired a lawyer to draft her Will giving her assets to her daughters, Sue and Sheila, but her largest assets passes to Sally’s brother when she dies. What?!
Sally’s Will gives everything to her daughters, but her brother is a designated beneficiary on Sally’s largest asset, her retirement account. Sally’s Will won’t work to transfer her retirement account to her daughters. Rather, her retirement account will pass outside of her Will directly to her brother.
We see situations like this all the time and often family members like Sue are shocked at the unexpected results which may occur when embarking on estate planning. When Sally’s Will was drafted, her attorney should have asked about her assets, and her beneficiary designations. But her attorney only asked her, “who do you wish to inherit your property under your Will”?
When Sally replied that she wanted everything she had to go to her daughters, her attorney never canvassed about the assets Sally had accumulated over her lifetime. Just because Sally had a Will naming her daughters as beneficiaries, doesn’t mean her intent to give her assets to them was accomplished.
Signing legal documents is only one part of an effective estate plan. Careful inquiry into the testator’s assets and how these assets will pass to the next generation must be explored. In our case, Sally is the person making the Will; she is the Testator. Most often some assets pass to beneficiaries directly. When this happens, the assets do not get to the intended beneficiaries under a Will.
From our example, the person happiest with Sally’s planning is her brother. But this is a sticky wicket.
What we find out too late is that Sally’s brother has been estranged from her family for 20 years. Yet, it is this long-lost brother who will inherit Sally’s retirement account valued at $600,000.00!
All that needed to happen to avoid this result was to update the beneficiaries on Sally’s retirement account naming Sue and Sheila to receive equal shares of the retirement account. Be careful when planning and make sure you know all of your assets and which assets pass under a Will and which assets pass by designations. Estate planning is more than signing a Will. Your team at Disability Planning Partners walks you through the various ways to transfer property at your death, properly!
In her practice with Disability Planning Partners, Claudia draws upon her vast legal knowledge and her personal experiences to implement a modern approach to disability and estate planning. She is accustomed to crafting modern, progressive plans that expand beyond the traditional use of a special needs trust or generalized Medicaid planning strategies.