From the desk of San Diego Probate Attorney, Kristina R. Hess
Yes, you thought your mother/father had done everything right! They set up a revocable living trust while they were alive. They transferred their house and rental property to the Trust…. brokerage account, maybe a bank account or two…
Yet, they forgot something.
Retirement accounts and life insurance.
Unlike assets that can be owned such as real estate, bank accounts, stocks, bonds, and brokerage accounts… life insurance and retirement accounts pass pursuant to the designation of beneficiary form the owner fills out.
The what? The designated beneficiaries.
Oh, yes, the form that you filled out when you opened the account where it asked you to designate beneficiaries of the retirement account or the life insurance.
However, sometimes people forget to fill out the form. Or, they unknowingly put down “estate.”
Or, perhaps, they designate minor children as beneficiaries.
Failing to name a beneficiary, listing your “estate”, or listing a minor child will all cause your life insurance or retirement account to go through the Probate Court process before the account can be transferred or paid to your heirs.
We have done probates in the last few years for just retirement and life insurance policies.
Word to the wise…. be sure to check who you have listed as the beneficiary on your life insurance and retirement accounts. Do not list minors. Do not list your estate. Make sure you have your living trust or your spouse listed as the primary and contingent beneficiaries.
You need to consult with your tax advisor or estate planning lawyer when designating beneficiaries on retirement accounts due to the tax consequences of your choices.
These are the little details that your loved ones secretly hope you do not overlook.
Be proactive, update your beneficiaries and make sure your loved ones don’t end up in San Diego Probate Court.
Create Legacies that Last!
Kristina
San Diego Probate Lawyer