This depends highly on your goals and net worth and is almost never the right choice unless you have very few assets (under $50,000, you have no debts, and your goals align with a simple distribution). Without a cohesive estate plan, your family is often left picking up the pieces and trying to make sense of the mess you left behind. Your financial advisor is likely thinking solely about avoiding probate. However, the goal in good estate planning is more than just avoiding probate. Assets with beneficiary designations (outside of your trust) pass to those individuals upon your death without going through the probate process. However, by bypassing your estate, your loved ones may not have the assets or liquidity needed to pay your final expenses. Further, the assets received by your beneficiaries through these designations are subject to creditors and divorce. Using beneficiary designations as a substitute to creating an estate plan almost always results in greater tax and liability exposure for you and your loved ones.
My financial advisor told me I do not need an estate plan if I use beneficiary designations on all of my accounts. Is this true?
About Swier Law Firm's Estate Planning & Probate Practice Group
Swier Law Firm has a nationally recognized practice in estate planning and probate law and handles the following types of cases:
- Estate Planning: Wills & Living Trusts
- Legacy Planning
- Family-Owned Businesses & Farms
- Powers of Attorney & Living Wills
- IRA & Retirement Planning
- Asset Protection & Business Planning
- Special Needs Planning
- Trust Administration & Probate
Take a look at our valuable estate planning books and articles. Our materials are full of tips and advice. All materials are written by the law firm's nationally recognized estate planning attorneys and provide detailed South Dakota-specific information designed to help anyone with estate planning issues. You can request your free copy by clicking on the book cover below.
Family Law and Estate Planning attorney helping families across South Dakota plan and protect their loved ones