Financial accounts can contribute substantially to the overall value of an estate. Retirement savings, investment accounts and other financial resources can represent a significant portion of an individual’s wealth. Those resources can cause family disputes, increase estate tax liability or be vulnerable to creditor actions when the account owner dies.
There are a number of different estate planning strategies that can help people avoid probate complications and protect their resources for specific beneficiaries. Filing specialized account designations with financial institutions is one tactic that can help protect financial assets from probate complications.
Beneficiaries can take direct control with proper authorization
It can take months or longer to finalize probate proceedings. Beneficiaries expecting to inherit financial resources from the estate may have to wait quite some time before they gain access to those resources. Testators with valuable financial assets can potentially keep them out of probate court by filing paperwork with their financial institutions.
Specialized transfer-on-death designation documents can designate a specific person to assume ownership of and control over a financial account when the current account holder passes. The beneficiary does not have authorization to use the account during the original owner’s life.
However, following the original owner’s passing, the beneficiary can present identification and necessary paperwork to the financial institution to assume control of the account. Arranging for the direct transfer of financial resources to specific beneficiaries can expedite access to financial resources and protect them from probate complications.
Testators with complex estates often need to use a variety of estate planning tools to optimize their control over their legacy and minimize probate-related liability. Transfer-on-death designations are among the various tools that can contribute to an effective estate plan.