Your estate plan is what your loved ones will follow when you pass away. It tells them your wishes for where your assets will go. While you might be tempted to list every asset you have, there are some that shouldn’t be included in the estate plan.
Financial institution accounts, such as IRAs or checking accounts, likely shouldn’t be included in the estate plan. These accounts are usually governed by payable on death designations that you set up when you start the account. The person you name in the payable on death document is who gets the contents of the account when you pass away.
Why shouldn’t you include those in your estate plan?
The payable on death is also known as a Totten trust. This means that the account can be transferred without having to go through probate. If you put the account in your estate plan, things could become problematic unless the payable on death and the estate plan match exactly.
If you have a different beneficiary listed for the payable on death and in the estate plan, the estate will have to cover one of those. This cuts down on what’s in the estate for the other beneficiaries. Instead, it’s best to keep the financial institution accounts out of the estate plan.
Anyone who needs to set up an estate plan should learn about the options they have for relaying their wishes. Taking care of this doesn’t have to be difficult if you have someone on your side who is familiar with the California estate laws. Just be sure that you get it all taken care of. Failing to get your estate plan in order means your estate will go through the intestate process in this state.