top of page

Estate Planning: Streamlining the Transition

estate planning, financial advisor

Planning the transition of your assets is about maximizing the amount passed on, simplifying the details of the handover, and minimizing cost and burden for the people you love. A thoughtful plan can look ahead and smooth obstacles in the same way you would if you were present.

You’ll need to work with an attorney to set up some important components of your plan, but there are also strategies that your financial advisor can put in place on your investment accounts to minimize costs and effect seamless, efficient transfers of your estate when it becomes necessary.

Minimizing Probate

Probate is the legal process by which a will is reviewed and determined to be valid and authentic. The court appoints an executor named in the will to administer the process: collecting the assets, paying the liabilities, and finally distributing the remaining assets. Probate can be lengthy and expensive, and it creates a public record of all your financial information, and the most private details o you family.

Assets that allow you to name a beneficiary will not need to go through probate and will transfer ownership relatively easily and quickly. These include life insurance proceeds, IRAs, 401(k) plans, and annuities.

Co-ownership of an asset can also avoid probate, as long as it is held as “Joint Tenants With Rights of Survivorship” (JTWROS). There are several conditions that must be met, and you may need to consult with an attorney. However, the advantage is that the property passes immediately and automatically to the survivor.

Assets that can be held this way are legion: cars, real estate, bank accounts, brokerage accounts, collections, etc. There can also be more than one co-owner. On the death of one owner, depending on the type of property, the transfer is initiated by either an affidavit, providing the death certificate of the decedent, or otherwise taking control of the property.

This strategy works very well for the family home and when deployed with financial assets it can ensure that they remain accessible to the surviving spouse or are easily transferred to children. However, all co-owners have equal shares, and have the right to control the accounts.

Wills and Living Trusts

A will is the most common estate planning instrument. While it is the only legal way to appoint a guardian for your minor children, a will can also be used for other estate planning purposes and offers a great deal of control over how your assets will be distributed, and who your beneficiaries will be. The drawback of using a will for passing on assets is that wills are subject to probate.

An option to avoid probate is a living trust or revocable trust, that allows you to access the assets in the trust during your lifetime, with the remainder passing to your beneficiaries. Because it avoids probate the assets will be distributed more quickly, without additional expense, and with privacy. While a will requires an executor, a living trust has a successor trustee.

Because a living trust is a more complex document than a will, the expense of creating it will be greater. Additionally, a trust must be funded; the assets named in the trust document must be transferred into the trust through separate processes.

The Takeaway

Estate planning is an important aspect of financial planning and will help to ensure that your wishes are carried out for yourself and the people you love.

Your financial advisor, working in conjunction with an attorney, can help you map out an estate plan that safeguards your assets.


bottom of page