By: Laurie Valentine- COO & Trust Counsel
Efficiently and effectively accomplishing God’s plan for how what you own will pass at your death requires you put together a “coordinated” plan for how your assets will pass.
Assets that are beneficiary-designated such as life insurance and retirement accounts will pass per the terms of the beneficiary designation document, not per the terms of your will or revocable living trust. Likewise, jointly-owned assets will pass to the surviving joint owner at your death, no matter what your will or trust says.
Only assets in your name alone or designated to be paid to your estate, your executor or the trustee of your trust will pass as your will or trust directs.
Failure to coordinate how assets will pass may result in a beneficiary receiving assets in a way you did not intend. Here’s an example: Your intention is for anything coming to your son from your estate at your death is to be held in trust for him until he reaches age 25. Your plan includes both a bequest to the trust for his benefit created in your will and a life insurance beneficiary designation naming your son as beneficiary. The bequest will be placed in trust, but the life insurance will be paid directly to your son, whether he has reached age 25 at the time of your death or not.
Make sure your plan is coordinated, and stays coordinated, by regularly reviewing how your assets are titled and how beneficiaries of life insurance, retirement accounts and possibly other assets are designated. Then compare asset titling and beneficiary designations with the terms of your will or trust.
For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.