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For those who consider probate (or avoiding probate) to be a significant issue, it is important to remember that probate is only a process to transfer assets. Regardless of whether probate is necessary or appropriate, the process should never become more important than the result. Specifically, the process of transferring assets should never jeopardize the answer to the following question: “Will my assets end up with the people I want, in the way I want them to receive those assets?”    

As I stated in past columns, some shortcuts to probate have a steep cost. They take away the ability to control how your assets will be distributed, and place that control in someone else’s hands. One example is the parent who adds a child as a co-owner of the parent’s assets. This shortcut may change the result the parent wanted.

But there is another way in which the process of transferring assets can undermine an estate plan. This risk arises when multiple methods are used to transfer assets within the same estate plan.

Take the example of a surviving parent who wants her children to each receive an equal share of her estate. She has her Will drafted to provide exactly that. However, this parent also has a life insurance policy which does not list all the children as a beneficiary. When that parent passes, will the kids each receive an equal share of that parent’s estate? The answer is “no.” The wishes stated in the Will do not change how the life insurance proceeds will be distributed. The distribution of the life insurance proceeds will be determined by the beneficiary designation on the policy.

In that example, it really does not matter whether probate is necessary. Regardless, this parent’s wishes won’t be fulfilled. The process of transferring assets, or the failure to coordinate that process, prevented the result sought by that parent.

The way your assets are transferred upon your passing is very important; but never more important than ensuring your estate plan creates the results you desire.   Come to a presentation to find out how simple it is to protect your estate plan and avoid unwanted results.