Estate Planning FAQs

When planning for your family’s future, the options can feel overwhelming. Should you get a will? Create a trust? And what happens if you do nothing at all? These aren’t just academic questions – your choices today will impact your loved ones tomorrow. In this second installment of a two-part Q & A series, I’ll break down the key differences between your primary estate planning options and explore practical ways to ensure your family is protected, no matter what the future holds. So, let’s dive in, beginning with a question about the basic estate planning documents.

Q: What is the difference between a will, living trust, and dying intestate? And what does that mean, practically speaking?

A: If you die without an estate plan, you do have a plan – it’s just the plan chosen for you by the state, and you may not like it. Your loved ones probably won’t like it because it means they’ll likely need to deal with a court process called “probate.” When you die without a will, it’s called dying “ intestate,” and it means that your assets are distributed according to state law after a process in which a judge decides who gets what. This could mean your assets would not go to the people you choose in the way you choose, and your family could face a lengthy, expensive, and public court process during an already difficult time.

A will is your basic instruction manual for what happens to your assets after you die, but it still requires your family to go through the probate process. While a will allows you to name guardians for your minor children and specify who gets what, your “executor” or “personal representative” must file the will with the court and potentially wait months or even years before receiving your assets. Plus, everything becomes public record – so anyone can look up what you owned and who got what, leaving the inheritors open to predators.

If you create a trust, your assets can be passed to the people you choose without a court process and completely privately. Think of a trust as a container that holds your assets during your lifetime. Then, upon your incapacity or death, a successor trustee you’ve named can step in to handle your assets, manage your affairs, and pass your assets to your chosen beneficiaries. With a properly funded trust, your beneficiaries could receive their inheritance within weeks or months instead of months or years.

Q: Is probate always required when someone dies?

A: The necessity of probate depends largely on how your assets are titled when you die and the total value of assets in your personal name at the time of your death. Assets solely in your name with no beneficiary designation must go through probate, and a Judge must order the distribution. Some exceptions: jointly owned property automatically passes to the surviving owner, assets with named beneficiaries (like life insurance policies and retirement accounts) go directly to those beneficiaries, and assets held in a properly funded living trust transfer according to the trust’s instructions, without court involvement.

These issues can be complicated and have a huge impact on your loved ones, so it’s important to work with a trusted advisor who can help you understand your goals, and then properly structure your assets to accomplish your goals, especially if you want to keep your family out of court and out of conflict. Keep reading to find out how I can help.

Q: What if I’m uncomfortable talking about death and money?

A: While it’s completely natural to want to avoid thinking about death and avoid talking about money, not planning for the reality of death or a possible incapacity before death can leave your loved ones with an expensive, time-consuming mess to clean up during what will already be an emotionally difficult time. Here’s what you absolutely must know: First, if you become incapacitated or die without a plan, the court will make all the decisions about your care and your assets according to state law, not according to what you would have chosen.

Second, if you have minor children and no estate plan, the court will decide who raises your children and who takes care of the assets you leave behind without your input. Think about that for a moment. A judge is a stranger to you and your kids, yet that’s who will decide your children’s future – who makes decisions about their education, health matters, and financial affairs. And, then, whatever you leave behind and whatever is left after the court process goes to your children when they turn 18 without protection (i.e., they’ll be free to spend it all as quickly as they want). If that concerns you, you need a plan of your own.

Third, your family will likely have to spend significantly more time and money dealing with your affairs if you don’t have a plan than if you had taken the time to create one. The good news is that making a plan doesn’t have to be overwhelming or uncomfortable—working with a trusted advisor who can guide you through the process step by step can bring you peace of mind, knowing you’ve taken care of the people you love.

Q: How can you minimize your family’s stress by handling these matters the simplest way possible?

A: The best way to minimize stress for your family is to create a clear, comprehensive Life & Legacy Plan before anything happens to you. Many people think creating an estate plan will be stressful, but lack of planning causes the most stress for families.

I make the process simple:

First, I help you understand what you own and what would happen to everything you own and everyone you love (including yourself) when something happens to you. Then, I support you to make informed, empowered choices about who should receive your assets, who should carry out your wishes, and how you want it all handled. Finally, I help ensure your plan will work when your family needs it by supporting you to review your plan regularly as your life changes and ensuring we maintain an updated inventory of your assets to ensure none of your assets are lost to the state due to oversight after your death.

Beyond creating the right legal documents, I’ll support you in other ways to make things easier for your loved ones. I’ll help you document specific wishes for personal items with sentimental value and have conversations with your loved ones about your choices so there are no surprises later. We’ll conduct a Life & Legacy Interview so you can pass on your values, insights, and stories – the intangible (and most important) assets that are often lost when someone dies. Most importantly, I will be there for your family when you can’t be there, to guide them through the process and ensure your wishes are carried out properly. This is the power of our Life & Legacy Planning® process.

How We Help You Create Peace of Mind

We understand that thinking about death and money can feel overwhelming. We’ve created a simple, step-by-step process to help you get your affairs in order and protect your family. Our Life & Legacy Planning process goes beyond just creating legal documents – we help you make informed decisions about your family’s future, keep your plan updated as your life changes, and ensure your wishes will be carried out properly when the time comes. Most importantly, we’ll be there for your family when you can’t be, providing the guidance and support they’ll need during a difficult time. You’ll gain peace of mind knowing you’ve done everything possible to make things easier for the people you love.

This article is a service of August Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Regarding estate planning, I get many questions about many topics. One of the most common questions I hear concerns account ownership and asset management. Understanding how accounts are titled and who has access to them isn’t just about convenience—it’s about ensuring your assets transfer smoothly to your loved ones while protecting them from potential risks.

In this first installment of a two-part series, I’ll answer the most common questions about asset ownership and management. I’ll also outline ways in which you can make things as easy for your family after your death. So, let’s dive in, beginning with a question about joint assets.

Q: What’s the difference between joint ownership and transfer-on-death designation?

A: Joint ownership means both parties have full access to and ownership of a specific account or piece of real estate while they are alive. When one owner dies, the surviving owner automatically receives full ownership. This can be convenient but comes with risks—a joint owner can withdraw all the money at any time, and the account could be vulnerable to either the joint owner’s creditors or legal judgments.

On the other hand, transfer-on-death (TOD) or payable-on-death (POD) beneficiary designations give you sole control during your lifetime. Your designated beneficiary has no access or rights to the account while you’re alive but receives the assets automatically upon death. This arrangement prevents another person from accessing your assets while you’re alive and avoids the court process (called probate) after you die.

One important note: When you have a joint owner on your account or a designated beneficiary, that person will receive all the funds after you die, no matter how old they are or what your family dynamics are. This can create conflict in your family or cause someone fiscally irresponsible to inherit a windfall with no safeguards potentially. Lawsuits are filed all the time by disgruntled siblings who find out that the caretaker sibling receives all the money in a parent’s account (or sole title to real estate) rather than being distributed equally among all siblings. If this concerns you, read on to find out how you can book a call with me to learn about your options.

Q: If I hold my property jointly or use a TOD or POD, do I need to have a Trust?

If you use joint ownership or TOD/POD instead of a Trust, you need to consider some traps for the unwary. First, as indicated above, jointly owned property could be at risk from creditors of either party. I think of my client, the granddaughter, who was titled on grandma’s bank account. When the granddaughter’s husband didn’t pay the bill on the copier contract for his business, the copier company sued and got a judgment against him. Next thing you know, grandma’s account gets garnished because it was held jointly with the granddaughter, and so the granddaughter was liable on the copier judgment.

Suppose you use a TOD or POD to avoid a scenario like that. In that case, the problem is that the TOD/POD only operates in the event of death, not incapacity, and TOD/POD could result in the wrong person ending up getting the assets or the assets ending up in probate if there is an unexpected “order of death” issue. Imagine grandma leaving the house to grandson using TOD, but grandma and grandson are in the car together when there’s an accident, and grandson dies first, with grandma dying shortly thereafter, and before she could change the TOD/POD. Who gets the property, and how? In this case, the property would have to go through probate and pass to grandma’s “next of kin” according to the state intestacy statutes. Given that grandma was leaving her property to her grandson, she likely didn’t want the “state’s plan” for her assets. But that’s what she’ll end up with.

The solution is not to use joint ownership or a TOD/POD to pass title to assets at your death. Instead, set up a trust and retitle the property. Then, everything can be handled easily, privately, and in our office for the people you love.

Q: What happens to retirement accounts and life insurance policies after death?

A: These accounts pass directly to your named beneficiaries, bypassing probate and any instructions in your will, as long as you have named beneficiaries and if you haven’t named a minor as a beneficiary. This is why keeping your beneficiary designations up to date is crucial. If your beneficiary designations are outdated – listing an ex-spouse or deceased person, for example – your assets might not go where you want them to. Even worse, if no beneficiary is listed, these accounts would go through probate, costing your loved ones unnecessary time and money. Suppose you’ve named a minor as a beneficiary. In that case, assets will be subject to a court process to hold the assets under court order until your minor beneficiary is “of age” – usually 18 or 21, depending on state law.

Q: Do I need an inventory of my assets?

A: Yes, and it’s critically important that you create an inventory and keep it current. We include this in all of our planning options because it’s one of the most critical parts of the planning process, even though, surprisingly, it’s not part of most estate planning with traditional lawyers or legal insurance plans. Our unique Life & Legacy Planning^Ⓡprocess includes an asset inventory because if you don’t inventory your assets, your family will not know what you have, how to find it, and how to access it as easily and affordably as possible. Lost assets end up in your state’s treasury as unclaimed property. According to the National Association of Unclaimed Property Administrators, approximately 1 in 7 people in the U.S. – or about 33 million people – have unclaimed property, totaling roughly 77 billion dollars. You need an asset inventory if you want to ensure that your assets go to the people or charities you want rather than to your state government’s unclaimed property fund. And it must stay up to date.

Q: How often should I review my asset inventory and account designations?

A: Your inventory and beneficiary designations need to be kept updated over time to reflect your current circumstances when you die. Your Life & Legacy Plan includes regular, ongoing reviews of your asset inventory so no asset gets lost.

It’s also important to update your asset inventory and account designations whenever you experience a significant life event such as:

Marriage or divorce
Birth or adoption of a child
Death of a beneficiary
Purchase or sale of significant assets
Moving to a new state
Starting a business
Retirement

When you work with me, you won’t have to remember this alone. I’ll proactively remind you to update your inventory and beneficiary designations and help make it as easy as possible for you to take action.

Q: What’s the best way to organize and store my asset information?

A: Create a clear, organized system that your loved ones can easily access if something happens to you. However, be careful about including sensitive information like passwords in your will, as it becomes public record after death. Instead, consider keeping this information in a secure location and telling your trusted family members, executor, or trust administrator how to access it. I will help you explore the best way to do this when we work together.

How We Help You Get Organized and Protected

We help you create a comprehensive Life & Legacy Plan that includes a complete asset inventory, proper account titling, and coordinated beneficiary designations. We’ll help you understand the implications of different ownership structures and guide you in making the best choices for your family’s unique situation. Plus, we’ll help you keep everything updated through regular reviews, ensuring your plan continues to work as intended. You’ll gain peace of mind knowing that your assets will go to the people you want in the way you want.

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