While it’s essential to have a will to appoint an executor to wrap up your affairs, and a guardian for minor children, not all assets actually pass under your will. Often the largest assets people own are their homes and their IRAs. And these assets typically don’t pass under your will if you own the home jointly, or have a properly completed IRA designation form for your IRA assets.
Your home will pass under your will only if yours is the only name on the deed when you pass away. IRA assets pass under your will only if you: (1) name your estate as a beneficiary, or (2) you fail to name a beneficiary on the proper form! If you leave IRA assets to your estate, odds are you’ll waste the opportunity for continued tax-deferral for your heirs, accelerate income taxes due and maybe even open up the assets to creditor claims.
Estate planning isn’t only having a will! Make sure your deed is titled right and you complete your financial institution’s IRA beneficiary designation form to properly name a beneficiary.
Check out Real Life Legal’sTM Elder Law: Legal Planning for Seniors and Estate Planning: A Road Map for Beginners to learn more.