Column: It pays to coordinate estate planning


Commentary by Jay Curts

Most of us have life insurance, a retirement account and a house. Some of us have a will that we made out years ago when we were worried about who would take care of our children if we died. All of us do not have to worry about the first $11.2 million of our estates being taxed by Uncle Sam (or is it Uncle Donald?).

However, when was the last time you thought about how your asset ownership, beneficiary designations, wills and trusts coordinate for the benefit of your heirs? An effective method to achieve practical estate asset distribution simplicity is to coordinate the use of asset beneficiary designations with a separate trust agreement.

Life insurance and retirement accounts are assets traditionally structured for distribution upon the death of the owner by direct beneficiary designation. These beneficiary designations have priority over any other instruction you may have established in writing in a will or trust. Under Indiana law, every asset is capable of ownership as a transfer on death (TOD) asset. Real estate, bank accounts, stocks and investment accounts, cars and other tangible assets all may convey a TOD beneficiary designation, allowing the owner to name the beneficiary of each TOD asset separately, if desired.

Coordination of a TOD asset designation strategy may be applied to provide both direct and timely financial benefit to your heirs for some assets (for example, life insurance proceeds) and practical administration structure for other assets (for example, your residence) to allow your chosen representative to sell or distribute for your heirs to receive, either outright or in trust.

This structure is accomplished by establishing a revocable trust agreement designed to receive title to the owner’s designated TOD assets. Those assets are administered after your death by your chosen trustee, pursuant to your written directions provided in that trust agreement, without the necessity of court administration of your estate or the transfer of ownership of your assets to a trust during your lifetime. And in this perfect world you have created, your heirs live happily ever after!

Jay Curts is an attorney with Coots, Henke & Wheeler in Carmel and concentrates his practice in estate and trust planning and administration, closely held business organizations, succession planning and transactions.

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