You may have heard about using payable on death accounts to get assets into the hands of your loved ones after you pass away. These accounts are set up to allow the primary account holder to name a beneficiary or in some cases multiple beneficiaries.
Upon the death of the primary account holder, the beneficiary becomes owner of the funds that are remaining in the account. This asset transfer takes place quickly because it is not subject to the time-consuming process of probate.
This short explanation makes payable on death accounts sound like a good solution, but they have drawbacks. One of them is the fact that many institutions will require multiple beneficiaries to split the remainder equally. A lot of people have different ideas about how they want their assets distributed. Some beneficiaries also may not be prepared to receive the inheritance immediately.
In addition, these accounts do nothing to protect the primary account holder in the event of the incapacity. Funds placed into a payable on death or transfer on death account are also still a part of your estate for estate tax purposes.
Estate planning is something that requires great care. In many situations, it is not wise to simply put all of your money into payable on death accounts and hope for the best. To create an intelligently constructed estate plan that is tailor-made to fit your unique needs, make an appointment to speak with a licensed Ashland Kentucky estate planning lawyer.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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