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To-Do or Not To Do? When To Use Paid On Death And/or Transfer On Death Accounts.

I can’t tell you how often clients tell me they don’t remember the last time they checked their beneficiary designations on their assets or their “Transfer On Death” and “Paid On Death” designations on their bank and brokerage accounts.  It is just not a common thing to do.  And if you have several accounts, you are even more likely to lose track. 

Despite this, a lot of people presume that such designations are a good way to avoid probate.  

It is not, however, a good plan.  Apart from forgetting to regularly check and update your designations, it does nothing to protect your beneficiaries from their creditors; and it might leave your estate without the ability to pay your last taxes, resulting in unequal distribution of your assets among your heirs.  Do not count on your beneficiary to correct your wrong, even if they want to.  Because if they try to do it right and redistribute the excess, they have now given a gift and it could be subject to gift taxes and filing of a gift tax return.  Even a simple will is much more comprehensive and is a better way to achieve your final goals for all your accounts and assets.

Give us a call today at 516-570-4016 so we can guide you through it.