By: Laura Zakrajsheck
Operations Manager, The Milwaukee Company
Although it is sometimes hard for me to imagine, Andy Willms and I have been working together for over 20 years. For over 10 of those years, I have assisted Andy’s wealth management clients. Before then, I was a paralegal for the estate planning law firm that Andy founded.
In both roles I have assisted clients with insuring their financial accounts are titled properly, and with the completion of their beneficiary designations. (I sometimes refer to these tasks collectively as “funding” in this article.)
The name in which an investment account is titled identifies who owns the account. In addition, how an account is titled can play an important role in determining whether probate will be needed to transfer ownership when the original account owner dies. Therefore, when I work on new account paperwork for a client, I always ask for a copy of their relevant estate plan so I can make sure that the accounts I open are titled correctly.
Beneficiary designations specify who is to receive an asset at death. It’s not possible to name a beneficiary for all types of assets. Retirement accounts, life insurance, and annuities are examples of the types of financial assets for which a beneficiary can be named.
Assets transferred at death by beneficiary designation are not subject to probate, and are not governed by the terms of a trust agreement, unless the trust is designated as the beneficiary. As a result, a beneficiary designation takes precedence over a Will or Trust Agreement with respect to who inherits the asset to which the designation applies.
Accordingly, it’s very important that your beneficiary designations are consistent with your estate plan. For this reason, in some cases it is considered a best practice to have them prepared by a member of the law firm who drafted your estate plan.
You should also review your beneficiary designations from time to time to make sure they are still consistent with your intentions and your estate plan. This is especially important when you update your estate plan, or a person you named as a beneficiary predeceases you. (Clients of The Milwaukee Company, can review their beneficiary information using Fidelity.com.)
Funding can seem to be a daunting task. The good news is just getting started is more than half the battle. An easy way to get the ball rolling is to make a list of everything you own and how everything is titled, and then work off that list to update accounts as needed. Your monthly statements will tell you how your financial accounts are titled. In many cases, you can view these online.
You can confirm beneficiaries on accounts either by looking at the account paperwork that was filed when you opened the account, or confirm online how the beneficiaries are designated.
The last step of funding is the easiest. File a copy of your asset list and beneficiary designations with your copy of your estate plan. Better yet, send a copy to your estate planning lawyer for safe keeping.
Of course, everyone’s personal situation is unique, so it’s quite possible you will encounter challenges not covered in this article. In that case, you may want to contact the law firm that prepared your estate plan for additional guidance.
The good news in all this is that once all of your accounts are properly funded you are all set. Job well done. That’s all there is to it! Now, it’s just a matter of getting started and keeping up with it. I know easier said than done, but you can do it.
 Financial accounts that do not carry a beneficiary designation can also avoid probate if those accounts are titled jointly with the right of survivorship, the account has a “transfer-at-death designation” (T.O.D.) or “payable-on-death designation” (“P.O.D.”), or are titled in the name of a trust.