Many people never get around to developing an estate plan — even a simple will. They figure they’ll do it when they get older. Of course, no one knows what the future holds. If a person dies without a will in Tennessee, their assets will be distributed to family members according to state intestacy laws — regardless of how the deceased person felt about any of these family members or how close they were in life.
Even if you haven’t gotten around to making a will (and if not, you should make that a New Year’s resolution), there are some simple steps you can take to ensure that people you want to get some of your key assets will get them. Let’s look at two:
Beneficiary designations
If you have retirement or investment accounts, you’ve likely named beneficiaries. This is simple to do. It allows the assets in the account to transfer to the beneficiary upon the account holder’s death without having to go through probate.
Just be sure to keep these designations current. If you’ve named an older sibling who passed away or your spouse whom you’re divorcing, you’ll need to update that. You can name multiple beneficiaries if you choose.
Joint ownership
This is commonly used for bank accounts. However, if someone is a joint owner, they also have access to the assets while you’re still alive. If you want a family member to get your savings and checking accounts when you die, but are concerned about them being listed as joint owners, you can list them as a “pay-on-death” (POD) beneficiary.
You can also add a joint owner (or “joint tenant”) on a real estate deed. That’s a little more complicated. For one thing, to ensure that the property transfers to that person on your death, you need to designate that the person has the “right of survivorship.”
If you’ve designated beneficiaries using these two methods (or others) and now you’re in the process of developing your estate plan, your estate planning documents and your other designations need to be consistent. The institution that holds the retirement plan, for example, has to abide by the wishes you designated with them — not by what’s in your will. Your attorney can help you ensure that all of your wishes are detailed correctly and consistently for all of your assets.
