Nearly every day in my law practice I hear the same statement from many Tennessee families:
“I have everything set up in case myself and my wife pass away. We have a bank account, an IRA, and an investment account totaling $250,000. All of our accounts have two of our children listed as beneficiaries. The third child we intend on leaving the family home to as he wants it and is well off. We also have our wills written leaving everything else to our three children equally.”
Many Tennessee families believe that if they name a beneficiary on their financial accounts, there is no need to engage in customized estate planning. However, let’s take a look at this statement. This married couple has three children. The beneficiary designations state that they are leaving their financial accounts to their two children. However, their Last Will and Testament says that they are leaving everything to the three children equally. This is the common scenario that can lead to fighting among the children and the heirs after death.
The child that was not listed on the financial accounts as a beneficiary could say, “Wait! Mom and dad named in their will that everything was to be divided equally. You need to give me my share of the $250,000!” Suddenly, the family finds themselves in a long and drawn out court battle that could last several years and cost thousands of dollars. Even worse, the damaged family relationships as a result of this fighting. Certainly not something that any family would want for their children and loved ones.
As I tell many Tennessee families, properly designating your beneficiaries on your financial accounts and life insurance is just one step of the estate planning process. However, you need to ensure that all of your estate planning documents coincide and do not contradict each other. For instance, at the very least you need a Last Will and Testament, Living Will, Health Care Power of Attorney, and Durable Power of Attorney for financial matters. In addition, you need to ensure that your beneficiary designations do not contradict the terms of the last will and testament.
In addition, as I explain to many of my clients, if you want to make sure that things are simple for your family when you are gone and reduce the costs and headaches associated with settling your estate, you should consider a revocable living trust.
If you have questions or concerns regarding the proper comprehensive estate plan to put in place for your family to ensure a smooth transition of your wealth to the next generation, then please contact our office for a complimentary visit so that we can discuss your estate planning needs and concerns in further detail.
We look forward to hearing from you!