For many years now, estate planning has largely focused on circumventing the probate process following the death of an estate holder. Depending on the size of your estate and the complexity of your assets, you may be faced with myriad options for how to construct your particular estate plan and ensure that your beneficiaries are not left waiting for an undue amount of time while the state has its way with your assets. For some individuals, bypassing probate may be as simple as designating some of their accounts as “payable-on-death” or “transfer-on-death,” and assigning beneficiaries to those accounts.
While this is not a one-size-fits-all solution, it may be a useful one for certain people. The simplify of the process can be disarming — you may even be able to assign them by filling out a single form from the institution holding your account and naming a beneficiary.
If you choose to modify your accounts this way, there are some specific pieces of care that must be taken. First, it is important to make sure that every account that you wish to transfer in the manner is individually designated as POD (or TOD). It is also wise to designate additional “backup” beneficiaries in the event that your first choice passes away before you do.
You may be thinking “This is too simple to be true!” It is possible that you are correct to be cautious. As in any financial matter, it is important to consult with a qualified legal professional before making any significant changes to your estate plan. The laws that govern state and federal regulations on transferring property are subject to change regularly, so the counsel of an experienced estate planning attorney can help you understand the full scope of your options and how best to plan for your estate’s future and the ongoing care of the ones you love.
Source: Teh Spectrum, “Avoid probate by making POD/TOD designations,” Bo Binghamn, accessed Jan. 06, 2017