Estate Planning Process Part II – Complex, Multifaceted but not Difficult

This article is the second article in a two-part series addressing the process of estate planning. In the first article, I addressed the importance of information gathering, estate plan type selection, and signing of documents. In this second article, I’ll address the importance of what’s generally referred to as ‘titling’, communication, and updates to your plan.

As you work through your estate planning process, a complete inventory of all assets that you own — whether real estate, bank accounts, personal property, or business interests — should be completed. You and your estate planning attorney should determine how each asset is titled, and how such titling fits and works in concert with your chosen estate plan. Your tax, financial, and insurance advisors can assist with this process, too. Even a sophisticated, well-drafted estate plan can be unraveled by the failure to complete the titling step.

For real estate, we typically use a transfer on death deed (TODD) with a Will Plan, and for a Trust Plan, real estate is typically retitled in the name of the trust. All real estate interests have to be addressed otherwise you risk stranding an asset and triggering the need for a full probate at the time of death. A primary purpose of a Will Plan or Trust Plan is to avoid probate, and this can be easily undone by failing to retitle a real estate parcel or an interest in real estate such as a fractional interest, interest in a contract for deed, or remainder interest.

Titling for bank accounts, investment accounts, and retirement (qualified) accounts needs to be addressed as well. There are several options as far as titling these types of accounts, and your particular needs and situation as well as the tax consequences should be evaluated in each case. For example, whether a bank account should be closed and a new account in the trust should be opened really depends on each person’s particular situation. Naming individuals or a trust as ‘payable on death’ (POD) or ‘transfer on death’ (TOD) are options. Of course, for life insurance and qualified plans, we name typically name a primary beneficiary and contingent beneficiaries.
Once your estate plan is complete, talking to your family members and other loved ones about your plan is very important. You’ll want to find a secure place to store your estate plan documents and tell the people you have appointed where they can locate them and other important documents. Talk to your health care provider about the existence of your Health Care Directive and provide them with copies.

Lastly, keeping your estate plan up-to-date is important, too. Changes in your circumstances, certain actions on your part, and common, lifetime events may have an impact on your estate plan. Such changes may include purchase or sale of real estate, a substantial change in your investments or financial plan, a birth, adoption, marriage, divorce, or death in your family, moving to another state, an inheritance or a significant change in your financial situation. If one of these occurrences takes place, modifications may need to be made to your estate plan. Sometimes it’s just a simple change that’s needed and sometimes it’s better to do a full update.
A good estate planning attorney and your advisors can help you put a tailored estate plan in place that’s right for you – they can help you complete all the steps necessary to complete the multifaceted puzzle that creates your estate plan – one that gives you peace of mind and ease of administration for your family. Now more than ever, it’s important to get an estate plan in place.

Any requests for topic suggestions may be sent to Although we cannot give you legal advice through the column, we can provide some general information that may be helpful for you to know. Our purpose is to educate and we hope that you can take something new away from this column each time you read it.