We noted what is a virtual truism in our immediately preceding blog post of July 10. We stated therein that, “Estate planners have always dealt with planning-related misconceptions, which abound in the general public.”
Here’s one, spotlighted by a writer in a recent U.S. News & World Report that points to a number of “myths” that are prevalent in the estate administration realm: A will covers all assets.
Actually, it doesn’t. If your will states that you are leaving all the proceeds in an investment account to Joe, but a payable-on-death designation in that account itself lists John as the sole beneficiary, guess who gets the money?
That’s right. Tough luck for Joe. The same holds true with life insurance and any other accounts with named beneficiaries. If a will drafter (testator) wants to ensure that a select beneficiary receives account assets, he or she must attend to that outside of a will.
The same is true regarding assets held jointly or in common with other individuals. A will controls only property that is held solely in the testator’s name. An experienced estate planning would be sure to timely remind a client of that.
Here’s another common misconception: Estate planning and related documents deal solely with financial matters.
Although finances are typically a central concern and focal point for most estate planners, other key considerations, too, are common. Health care concerns are paramount for legions of planners. Many individuals will want to execute a power of attorney granting a trusted third party with discretion over health care decisions in the event of a planner’s incapacity. An advance health care directive (also termed a “living will”) can set forth a planner’s desires concerning end-of-life care and final moments.
We cite several other common misconceptions regarding planning in our above-linked blog post from last week.
The bottom line with estate administration is that it is an on-point and important exercise for virtually every individual and family in California and nationally that thinks it might be.
A proven estate planning attorney can provide further information.