First, Happy 250th Birthday, America! Are we perfect? Obviously not. Is there anywhere else I’d rather be? Absolutely not. We are great. We are flawed. We aspire to be and are often seen as the shining beacon on the hill. Let’s live up to those ideals, shall we?
OK, now back to our regularly scheduled programming around our family legacies. And I came across a post from CPA Kurt Supe which highlights three potential holes in a family’s estate plan:
- Pre-2020 trusts named as IRA beneficiaries often don't work the way they used to. The SECURE Act changed the math. Some are still fine. Many aren't. The only way to know is to have it reviewed.
- Your beneficiary forms override your will. People update the will every 10 years. They never look at the beneficiary designations on the IRA, the 401k, the life insurance.
- If those forms still name an ex-spouse, a deceased parent, or "my estate," the will doesn't matter.
Is our inheritance about money? Of course it is, but that’s not the goal, it’s the outcome. The goal is to do the work on the paperwork and planning workstream so that we can ensure the money goes where and how intended. Without good processes, these details get missed and family harmony can be impacted, sometimes irreparably.
Without doing the work, the Great Wealth Transfer will become the Great Probate. Quoting Mr Supe again, “Your trust may not be funded. A trust with no assets in it is paperwork. Most trusts I review have the house, the brokerage, and the bank accounts still titled in the individual's name. If they die, those assets go through probate anyway.”
It’s not enough to have a trust, we need to fund it. It’s not enough to fund the trust, we need to review the beneficiary paperwork. It’s not enough to review the paperwork once, there needs to be a plan and process in place to ensure a proper cadence and clean up. We can help each other. And together, we can move our families forward…