Of the 40% of Americans who actually have a written plan for how they want their assets to pass at their death, only 30% of those plans are up-to-date. And, I would suspect, some of the “up-to-date” plans are no longer completely “coordinated”.
A “coordinated” estate plan is one that coordinates the provisions in your “written plan” for who is to inherit what when you die (your Will or Will and Revocable Living Trust) with how your assets are titled and who are named as beneficiaries of life insurance policies, IRA’s and other contractual death benefits.
Here’s an example of what can happen if you don’t have a “coordinated” plan: Your Will sets up a trust fund for your son to be held until he is 26 and your IRA beneficiary designation directs your son’s share of the IRA be added to the trust created under your Will. However, the beneficiary designation for your life insurance policy names your son as the outright beneficiary. At your death, assuming your son is under age 26, your probate assets and your IRA will be held in the trust for your son, but the life insurance will be paid outright to him. If your intention was for your son to not have complete ownership and control of anything he inherits from you until he is 26, your “uncoordinated” plan defeats your objective.
To assure you have (and keep) a “coordinated” estate plan, check asset titling and all beneficiary designations when you make a Will or Revocable Living Trust or make changes to those documents.
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.