Asset titling can change the estate plan

You may have proudly completed your Will, Financial Power of Attorney, Health Care Power of Attorney and Living Will or Advance Health Care Directive and feel that everything has been taken care of. On the other hand you may have opted for a Living Trust.

In either case, you might believe you have completed everything necessary to establish your estate plan. Maybe you recently read that some well known person died without a Will, leaving his estate in disarray and this was your incentive to forge on. You might have had an experience in your own family.

Having completed your estate documents, you might believe that is enough.

You still have one very significant step to take. You must examine your assets to see how they are titled and also examine your beneficiary designations for life insurance and retirement funds — IRAs, 401(k) s, 403(b)s. If you have not considered these, your estate plan is incomplete and your assets may be directed in a very different manner than you expected on your death.

Even experienced financial advisors, when speaking to audiences, sometimes suggest that listeners can assure their assets are distributed as they want on death by preparing Wills without discussing titling of assets or beneficiary designations.

A Will covers only probate assets. Non-probate assets pass by other means typically joint titling or beneficiary designations on retirement funds such as IRA’s or beneficiary designations under life insurance or annuity policies or funds held in trust, or transfer on death (TOD) or payable on death (POD) accounts.

A study conducted several years ago in the U.S. determined that more than onehalf of assets in the U.S. do not pass by Will, but rather by joint titling, beneficiary designations and trusts. Titling and beneficiary designations take precedence over the Will.