There are so many ways to transfer assets upon someone’s death. Texas now permits virtually all property, real property and otherwise, to be transferred by a right to survivorship deed or agreement. Tax deferred accounts such as IRAs and 401Ks can be transferred by beneficiary designations. Life insurance policies have always had beneficiary designations. Bank accounts in Texas with multiple owners are invariably right of survivorship agreements where the survivor automatically gets the cash. Don’t all of these devices avoid the need for a Will in probate?
Sometimes a person’s affairs simply as they age, and the use of right of survivorship agreements, transfer on death deeds, or beneficiary designations is an advisable way to hopefully avoid probate. For most, trying to do an estate plan in this piecemeal manner without a Will or other comprehensive estate plan, like a Revocable Living Trust, is risky. Just consider that most beneficiary designations and right of survivorship agreements are between couples, so what happens if they both die simultaneously? The beneficiary designations are useless and there is no Will to streamline the handling of the estate. That is but one example of how these types of beneficiary designations only work if people die in the right order. Life and death, however, often do not occur in the order we anticipate.
Also, it can be exceedingly more difficult to try and keep an estate balanced, fairly distributed, and current if you are relying on multiple beneficiary designations to transfer the assets the way you want. A Will is a more comprehensive planning tool that considers virtually every contingency and provides for the disposition of the assets pursuant to a global plan. In a Will, Pyke & Associates almost always considers the possibility that a beneficiary can be disabled, incapacitated, or having creditor problems, none of which can be planned by using beneficiary designations. Comprehensive, effective planning to protect and preserve your assets, and deal with the numerous contingencies which life brings, requires a comprehensive planning tool like a Will or a Revocable Living Trust. The piecemeal process of beneficiary designations often leads to heartache.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.
