At a recent client conference, I asked some long-time clients of mine whether any changes to their revocable trust were necessary in light of life changes. Their response was horrifying.
“Our financial advisor told us we don’t need a trust, and we can just put beneficiaries on our accounts.”
Putting aside the illegal practice of law without a license to do so by the financial advisor, his or her advice is problematic to say the least. The following five potential land mines are completely ignored by just naming beneficiaries on financial accounts.
1). Missed Property
The first problem that arises when individuals try to prepare a “do-it-yourself” estate plan is that assets get missed. Did all of the bank accounts get beneficiaries? What about CDs at another bank? What about real estate? What about valuable personal property like cars, art or gold?
As much as the bank accounts with beneficiaries do avoid the probate court, any significant (over total value of $50,000) property that does not have beneficiaries will still have to go through the costly and public process.
2). No “Pot” of Assets
Even if every account does have beneficiaries, the second problem that ...
