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Friday, December 13, 2019

How Your Accounts May Impact Estate Planning and Administration

Q: How can having many accounts or joint accounts impact estate planning and administration?

When New York and New Jersey estate planning attorneys meet with a client to craft a comprehensive estate plan, they begin a fact-finding mission that examines the individual’s unique lifestyle, their assets and debts, their goals and plans, their worries and dreams.

Despite following an estate planning road map of sorts, no two plans are exactly alike. Each is impacted by many factors including marital status, prior divorce(s), minor children, grown children, business relationships, and more—and the person’s assets and liabilities.

What documents and information will my estate planning attorney need?

Gathering records and information regarding all assets and debts is vital to effective estate planning. Real estate, bank accounts, retirement accounts, stock, cars are just some of the more common assets many people have, while mortgages, student loans, medical bills and credit card debt are some common liabilities. It’s also important to know whether title to the assets is individual or if they are owned jointly with another person. Joint accounts are immediately payable upon death to the surviving account holder and do not pass through the probate court process. Most retirement accounts pass to the beneficiary who was designated on the account at the time it was created (or through a subsequent amendment) and avoid probate, too.

In crafting a personalized estate plan, all of the above will be examined in the context of goals for the person’s life, as well as the future of any surviving spouse or children or grandchildren, and in line with any charitable or other bequests. While a last will and testament is the foundation and starting point of an estate plan, in many situations a living trust may also be appropriate.

How your accounts are held will impact not only your estate planning but also your estate administration after you’re gone.

As indicated, joint accounts automatically pass to the joint account holder upon the other account holder’s death—outside of the probate court process. Sometimes, parents keep joint bank accounts with one child on the account—with the “understanding” that that child would divide the account proceeds equally among all of their siblings. But they’re not required to do so—even if the will says otherwise. In fact, doing so could potentially cause a gift tax issue if the morally-driven, generous sibling does try to do the right thing by their siblings.

Having an excessive number of bank accounts in different institutions is more common among the elderly than the millennials. Even if they are held individually, taking inventory of them all and getting the accounts through the probate process and to the proper beneficiaries can be time-consuming. Depending on the particular situation, consolidating multiple accounts into a living trust may not only result in a higher interest-rate but could help avoid the time and expense of probate. A skilled estate planning attorney can advise if this option is worth exploring.

Contact Merlino & Gonzalez to Schedule a Consultation

If you need assistance with an initial estate plan, would like to modify an existing one, or need help administering an estate, the experts at Merlino & Gonzalez can help. Contact us to schedule a consultation.

From our offices in Staten Island, New York, and East Brunswick, New Jersey, we represent clients in both states in all aspects of estate planning and estate administration.


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