So, you’ve met with an estate planning attorney and signed your estate planning documents. In addition to ancillary documents, that plan consists of a will and maybe trust planning or entity work. However, there is additional work to be done after the ink has dried. Once your estate plan is complete, the next step is confirming that your assets actually pass according to your plan. To do this, you’ll need to review the ownership of your assets. Do you own the asset individually and alone? Should the asset be owned by someone or something else now? Do your assets have appropriate beneficiary designations?

Coordination of Assets

If your estate plan does not involve an inter vivos trust (trust created and managed now, during your lifetime) and does not include an entity that requires any current funding (both discussed below), then you may only need to coordinate your assets to follow your estate plan after your will is signed. It is a shame to see clients spend time and money to prepare a thoughtful and thorough estate plan via their will, only to see the will go by the wayside because no assets passed according to the will. How does this happen? To understand this issue, you must first understand the difference in “probate” assets vs. “non-probate” assets.

A probate asset is an asset that passes according to your will. These are generally assets that have no beneficiary designation or a designation that sends the assets to your will or estate with various language. To be a probate asset, the asset should also not be owned jointly with rights of survivorship with anyone else. Assets owned jointly with rights of survivorship will continue on with the other owner(s) after your death, rather than going through your will. Comparatively, non-probate assets pass outside of your will. These are assets with beneficiary designations, other owners, and/or those owned by a trust or other entity (in which case they’ll pass according to the terms of that entity or trust). As an example, if you name several beneficiaries (all four of your children perhaps) in your will, however you have named only one child as an owner with rights of survivorship on your household bank account, then that account is a non-probate asset. At death, the account would not go through the will and would instead totally pass to the surviving child who has ownership of the account. Whether that child wants to subsequently share the account assets with his or her siblings or agree to pay any estate debts if up to that child who would not be bound to do so. This is especially important if trusts are set up in the will to benefit the beneficiaries. If your assets pass as non-probate assets, then they will not go through the will and be subject to trusts and other terms in your will. As an illustration, if your will says no one can manage their own inheritance until they reach age 25, but you’ve named your 20-year-old granddaughter as beneficiary on the accounts, then that granddaughter gets to have that money outright at 20 rather than waiting until her 25^th birthday. This becomes an even bigger issue with individuals with special needs who need to receive their inheritance in a special needs trust.

Trust or Entity Funding

Some estate plans involve entity planning for liability or gifting purposes. In those cases, it is important that the asset(s) are deeded, assigned, or transferred to the entity subsequent to creating the entity by signing documents. For real property, a deed should be executed transferring the asset from the individual to the trust or entity. For personal property, insurance policies, and business entities, an assignment is typically executed transferring these items to the trust or entity. A transfer on death designation is also available for your vehicle using Form VTR-121. In some cases, it may be preferable to name the trust as the beneficiary of your vehicles upon your death. If you have financial accounts to be owned by your trust and your trust does not have its own tax identification number, the institution may allow a simple change in style or title of the account. In other instances, and for some institutions, there will be a requirement that your account be closed and reopened in the name of a new account. This means additional work on your end to be sure all ACH withdrawals or automatic deposits are also moved to the new account. Finally, some accounts cannot be owned by another entity and must be maintained by the individual (such as individual retirement accounts) so those will require changes to your beneficiary designations, rather than changes to the ownership of the account. In addition to properly addressing the transfer of assets, you’ll want to confirm that existing loans and/or insurance on the assets is tidied up too. For example, when transferring real property with a mortgage to a trust or entity, it is best practice to first discuss the consequences of this transfer with your lender to ensure there will not be an acceleration of the loan.

What Happens If You Don’t Follow Up?

In most instances, the estate plan you create is going to last some time. You should review the estate plan and revisit all asset ownership and beneficiary designations every few years and upon any major life event. If your plan is a trust-based plan, then all your assets should be owned by the trust, or the trust named as beneficiary. This may be the biggest gap in trust-based planning-obtaining new assets and not following the funding instructions. If your plan is trust-based and you open a new brokerage account, the account should be in the name of the trust. If your plan is will based and you create a new IRA, the beneficiary designation for your IRA should follow your instructions. If you’re using a life insurance policy to fund the buyout of your interest in a business and your business increases in value, so should your life insurance. All these items take careful consideration to ensure your loved ones are not thrown into the unexpected upon your death- clinging to cash or begging beneficiary siblings to pay for things like funeral expenses. Following the funding and coordinating instructions is key to a successful estate plan.

ABOUT THE AUTHOR: Emily B. Taylor is a Senior Associate at Rapp & Krock, PC in the Probate, Estates, Elder Law, and Trusts group.

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