Five Ways Assets Pass at Death

  1. Operation of law (e.g., joint tenancy with right of survivorship)
  2. Beneficiary Designation (life insurance, retirement assets, annuities)
  3. Will
  4. Trust (revocable or irrevocable)
  5. Intestacy (no will)

In a properly designed estate plan, Items 1, 2, 3 and 4 will be coordinated so that all of your assets pass to your intended beneficiaries in the most tax-efficient manner. Income taxes are a particular issue with respect to Item 2.

Item 5 is the product of (a) failing to plan altogether, (b) improper design (e.g., the will does not dispose of all your assets), (c) faulty execution of the will (e.g., no witnesses or signatures in the wrong place), or (d) lost documents.  Intestacy often leads to assets passing in undesirable ways, such as to spouse and minor children, rather than all to spouse.

More to come…

Posted by Joel D. Roettger, JD, LLM, EPLS

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