Stop! Drop what you’re doing and check your beneficiaries!
If you have a testamentary trust, it might be a smart move not to name the trust as a beneficiary of certain assets such as annuities, life insurance, bank accounts, a brokerage account or a qualified retirement account. Please check your policies and if you see that your trust is named, contact your insurance or annuity company and get a request a change of beneficiary form.
In most situations, the named beneficiaries should not be “the Estate of…” or “The Trust of…”. These accounts should have a named beneficiaries -the actual names of the persons who will inherit the asset. We have sent out numerous letters, memos, newsletters to this effect but we still find instances where this isn’t corrected.
If beneficiaries are designated by name, the inheritance should pass directly to the beneficiary WITHOUT the need or expense of probate. In the case of a brokerage account, you are permitted to set up a TOD or “Transfer on Death” designation to a named beneficiary. In the case of banking account, consider using the designation POD or “Payable on Death” which may reduce the need for probate expense.
Your retirement account, IRA, 401(k) etc. can also have a named beneficiary which will designate where your assets will be directed.
Like all important issues, always seek competent, licensed, authorized professionals before making any important decision.