Getting an estate plan is not as easy as just going to a lawyer and having him or her draft some documents for you to sign. Josh Bryant takes a much more comprehensive approach. If you have a trust, there are some assets that we'll place in trust while you are alive. However, some assets cannot be placed in trust and will require a designated beneficiary - someone who will automatically get the asset at your death. Here are four assets that need designated beneficiaries.
Checking, Savings, Money Market, and Other Bank Accounts
You can go to your bank and establish "Transfer on Death" (TOD) beneficiaries on those accounts. This is usually done by a simple form that your bank can provide you. If you do not have a beneficiary designation on these accounts, the assets will have to go through either small estate administration or probate. If you have a trust, it is usually easier to just go ahead and open up accounts in the name of the trust. However, there are often times that clients have a long standing bank account that they'd rather keep, in which case it is necessary to establish the trust as the TOD beneficiary. You can also list individuals as your beneficiary. Josh Bryant will help you make these decisions and get the proper paperwork signed.
Brokerage, Retirement, and Other Investment Accounts
You can also call your financial advisor and make sure that there is a TOD designation on your stocks, mutual funds, bonds, ETFs, and other investment vehicles. This is usually done on a form as well, but may require additional paperwork. Some of these assets cannot be transferred to a trust during your lifetime, making it that much more important to ensure your beneficiary designations on these accounts are in order. Without them, a probate proceeding is usually the only way to get the assets transferred to your heirs.
You should also call your insurance agent and make sure that your life insurance policies have a proper beneficiary designation. You would have established a beneficiary when you took out the life insurance policy. However, if you have a trust it will be necessary to update that beneficiary designation to ensure that the trustee of your trust is the beneficiary. That way, your life insurance proceeds are distributed under the terms of the trust rather than outright to named beneficiaries of the life insurance policy.
Arkansas is unique in that its laws allow you to file a "beneficiary deed" that will transfer your house to the beneficiaries listed in the deed at your death. Usually, it is simpler if you have a trust to just transfer all real estate into the trust rather than wait until after death to do it. However, there are always reasons why that might not be best for you, and as such you'd need a beneficiary deed to get the home into the trust. If you don't have a trust, a beneficiary deed is a great way to help keep real estate out of probate.
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I follow Christ. I have a beautiful wife Megan and three wonderful children, Harrisen, Rebekah, and Carter. I have an M.Div. from Liberty Baptist Theological Seminary, am licensed to practice law in several state and federal courts, and live in Rogers, Arkansas. I write a blog and produce a podcast. And I do it all that others may know Christ.