The Elder and Disability Law Firm, APC July 10, 2013

While there are some rather complicated legal instruments that are used in the field of estate planning there are some relatively simple solutions that can be implemented as well. One of these would be the utilization of payable on death or transfer on death accounts, but you have to be aware of the limitations of these accounts.

When you create a payable on death account at a bank or a brokerage you include the selection of a beneficiary. This individual would assume ownership of the resources that remain in the account at the time of your death. The transfer of assets would take place outside of probate enabling the beneficiary to receive his or her inheritance in a fast and efficient manner.

On the downside, these accounts do nothing to provide estate tax efficiency. You have full control of the assets while you are still alive and you are the direct owner of the account so these resources are considered to be a part of your estate for estate tax purposes.

Another thing to consider would be the possibility of incapacity. These accounts are only accessible by the beneficiary in the event of your death, so the funds would be unavailable to the beneficiary should you become incapacitated.

These are a couple of reasons why you may want to take pause before utilizing payable on death accounts to transfer assets to your loved ones. To learn more and explore your alternatives, simply take a moment to arrange for a consultation with a good San Bernardino estate planning lawyer.

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