There may not be an overabundance of families in Canton who will need to worry about going over the government's current $5.25 million federal estate tax exemption. Even so, estate administration should be done carefully, experts say, keeping beneficiary designations up to date. This helps avoid nightmare scenarios, such as an ex-spouse getting all the assets and the children getting none. Don't rely on the government to clean up a beneficiary mess, either, as the Supreme Court has made it clear that beneficiary designations on different financial products are not superseded by a will.
The experts, who have seen horror stories of old beneficiary instructions giving everything to a family villain instead of its deserving heroes, say to turn in forms now for your brokerage, bank, retirement fund, life insurance and company benefit plan. If designations exist but are out of date, they advise you to update them immediately. Putting it off oftentimes means it is forgotten, and all your life's hard work to take care of your loved ones could go down the drain because of that procrastination.
Apart from seeing that your financial wishes for your family are fulfilled, properly designating individual beneficiaries also avoids probate after your passing. Everything simply goes to its named beneficiaries. The alternative, naming your estate as the beneficiary instead of individuals, means that possibly time-consuming and expensive court-supervised probate may be required before anyone gets anything.
Proper estate administration is key to seeing that your desired distribution of assets goes according to your estate plan. A Michigan attorney with solid experience in estate planning may be able to offer valuable service and advice. Such assistance might come in the form of will planning, asset valuation or serving as an estate's executor.
Source: MarketWatch, "Don't make this common estate-planning error", Bill Bischoff, September 17, 2013