When you open up a bank account at most financial institutions, you have the option of naming a beneficiary to whom the assets in the account would be transferred after your death. There are brokerage companies that offer this type of account setup as well.
This can sound like a very simple estate planning solution, especially because of the fact that this transfer of assets would take place rather quickly and efficiently outside of probate. Probate is the legal process of estate administration and it can be expensive and time-consuming.
However, at second-glance, these accounts may not be the answer by a long shot. For one thing, you may not be able to allow for multiple beneficiaries to receive varying percentages of the resources left in the account. Second, there may not be a provision for what happens if a beneficiary pre-deceases the account owner. Grandchildren, or other important beneficiaries, may be left out. Finally, and worst of all, is that using account designations as an estate planning “substitute” is a nightmare to manage. In effect, you are setting up multiple plans and the ongoing management of them can become a headache. That’s no way to simplify or clarify.
For another there are no particular tax benefits involved in the use of a transfer on death account. Assets placed in the account are not protected from creditors and claimants, and there is no way to include contingencies to allow for the possible incapacity of the primary account holder.
All of the details above are very important to consider if you are serious about covering all of your bases. The best way to approach things is to seek comprehensive, holistic solutions that are recognized as being industry standards so that you are certain that you are leaving no stone unturned.
The first step is to arrange for an informative consultation with a licensed and experienced Oklahoma City estate planning lawyer. Your attorney will evaluate your unique situation, gain an understanding of your objectives, and provide you with a plan that is ideally suited to meet your needs.
Author, President and Founding Attorney
Parman & Easterday