Many times, people spend a great deal of time, energy and money creating an estate plan. However, the plan does not work, because their assets are not funded properly.
Funding assets is a critical step in the estate planning process that is very frequently forgotten, as reported in The Farmer’s article “Funding assets to your estate plan.”
Funding is the process of titling assets, so that the estate plan and the assets are aligned. Each estate plan is different. However, the funding process includes tasks such as changing ownership on accounts, establishing beneficiary designations and transfer on death designations.
One common mistake: opening a joint checking account to cover funeral costs and then not funding the account. For estate plan wishes to be carried out, accounts need to be funded.
After death, a will is reviewed by a probate court and assets included in the will are managed and distributed by the executor, who is sometimes also known as a personal representative.
If your assets have been placed in a revocable trust, the trust names a trustee who manages and distributes after your death. You need to make sure the ownership and beneficiary designations for all assets are correctly named. These include relatively common financial tools like checking and savings accounts, CDs, bonds, stocks, life insurance policies, real estate, investment accounts and any business interests.
Some accounts should not be in a trust, such as retirement accounts and incentive stock options. An estate planning attorney will be able to help you determine what accounts should be held in a trust and which should not be.
In addition to wills and revocable trusts, some estate plans incorporate joint ownership and transfer on death designations.
Speak with an experienced elder law attorney to make sure your assets are aligned with your estate plan.
Reference: The Farmer (March 16, 2018) “Funding assets to your estate plan”
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