Beneficiary Designations: Good. Living Trusts: Better
26 Jan 2012 / By: Mark S. Eghrari / Category: Estate Plans, Financial PlanningGreat estate plans accomplish a number of goals. Chief among them is avoiding probate. Owning property jointly is one way to avoid probate, and designating someone as the beneficiary is another. You can even designate a beneficiary for property, using strategies like Transfer on Death and Payable on Death provisions.
Designating a beneficiary is a good way to avoid probate. Setting up a Living Trust is a better way. Why?
- Timing. Living Trusts allow you to specify when the beneficiary can access funds or take control of property.
- Creditor protection. Structured properly, a Trust can help prevent creditors from tapping assets held in the Trust.
- Ease of management. If you are disabled or incapacitated, a Trust can allow the trustee to take over management of assets so decisions can be made on your behalf.
- Avoids probate. If your beneficiary passes away before you do, you’ll have to name another beneficiary – or the asset(s) in question will need to enter probate.
Living Trusts are flexible estate planning tools; beneficiary designations are not. Contact us to see how a Living Trust can accomplish a number of goals – both while you are living and after you pass away.
Mark S. Eghrari & Associates, PLLC is a member of the American Academy of Estate Planning Attorneys.
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Tags: beneficiary designation, estate planning, Living Trust, trustee
