Remember, your estate plan does not end with a will

Last year I began the New Year with a column reminding readers that a will is not the same as an estate plan. The thought was important enough — and still is — that I thought it worthwhile to repeat and add to it. When you chose to write a will you have taken an important step in the direction of planning for your family and beneficiaries. It is only a first step and planning becomes more important as conditions change. Here are reasons why that is true.

STEP 1 >> Divide Your Assets Into Those Titled in Your Name Alone, Those Titled Jointly, Those That Will Go By Beneficiary Designation If you think your will has the final say in determining how your personal estate is distributed on your death look first at how your assets are titled. Note there are different rules. Then, consider those that are titled only in your name, those that are titled jointly and those that will pass by beneficiary designation. The result could come as a shock although, generally speaking, if you are married and you have titled assets the traditional way, there may not be much of a difference.

For a married person, for instance, if your assets such as your house and bank and investment accounts are titled jointly with your spouse (in a category known as tenants by the entireties) those assets pass to your spouse directly on your death. If you have an IRA, 401(k), 403(b) or similar retirement asset account or if you have life insurance you have probably named your spouse as beneficiary so these assets pass without much difficulty except for the completion of forms with the respective companies by your spouse on your passing.

There are exceptions. You might have kept one or more assets or accounts only in your name. These would generally pass by will unless they pass by beneficiary designation such as life insurance so a closer look is required.

Now, consider how assets would pass if you are a widow or widower or if you are single or divorced. In many cases your assets now are titled only in your own name. You might not have named secondary or “backup beneficiaries” which is something you could have done when your original documents were drafted. If you did not do it then it is not too late to name these “secondary” parties after the passing of your spouse or your original beneficiary.

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