Planning for dying is never easy, and it can be an especially difficult task for those with large families and/or significant assets. The complexity of the laws surrounding inheritance and taxes continues to increase, and attempting estate planning today without professional advice is unwise.
Asset titling is an important part of a comprehensive estate plan. Most people think that if they have gone to the trouble of setting up a will, then they have basically taken care of their estate planning. That might have been true 40 or 50 years ago, but the complexity of the tax and inheritance codes today means you really need to work with a professional like Caldwell Trust Company to examine all of your assets and make sure they are assigned to the right individuals or organizations. This is particularly true if you have set up a management trust or similar structure as part of your estate plan.
A comprehensive review of your asset titling and beneficiary designations is especially important if you have resided in several states. Different states recognize different forms of ownership, and moving from a community property state to a common law state definitely could have an impact on asset ownership rights.
Understanding Differences in Asset Classes
Wills (and trusts) will automatically pass most assets titled in your name to the beneficiaries named in the document. Some types of assets, however, such as life insurance, annuities or various types of individual retirement accounts pass directly through a beneficiary designation regardless of what is stated in the will or trust document. Some banking or brokerage accounts may also be directly inherited despite designations otherwise in a will or trust, because of the legal terms relating to the signature card on the account.
Consider a “Convenience Account” to Prevent Asset Titling Problems
Close to half of U.S. states have enacted Uniform Multiple-Person Accounts Act legislation, legalizing so-called “convenience accounts.” With a convenience account, there may be as many signatories as desired by the account holder.
A convenience account in effect provides an account signatory a power of attorney, except that the signer’s authority is only for that specific account. There’s no right of survivorship with convenience accounts. Estate planning experts often suggest convenience accounts when clients want another trusted person to have access to the account, but not directly inherit the account. Of note, all deposits by convenience signers or accruals to the deposits do not count as a gift to the account owner.
About Caldwell Trust Company
Caldwell Trust Company is an independent trust company with offices in Venice and Sarasota, Florida. Established in 1993, the firm currently manages over $800 million in assets for clients throughout the United States. The company offers a full range of fiduciary services to individuals, including services as trustee, custodian, investment adviser, financial manager and personal representative. Additionally, Caldwell manages 401(k) and 403(b) qualified retirement plans for employers.
