It is important that nonprobate assets such as life insurance, joint tenancy bank accounts, IRAs and qualified plan death benefits pass in a manner that does not disrupt the estate plan. This can be a time-consuming task. Simply designating the surviving spouse as the beneficiary of all nonprobate assets can be disastrous. We find major mistakes in most new client’s estate plans, due to the lack of proper coordination. This will lead to estates paying hundreds of thousands of unnecessary estate taxes, and in many cases, over a million dollars of extra estate taxes, even when the client has valid credit shelter wills.
In the case of life insurance, the best solution is often to create a separate life insurance trust as the death beneficiary.
BASIC ESTATE PLANNING DOCUMENTS
Coordination of Nonprobate Assets with Overall Estate Plan