Know What You Have: The Importance of Understanding Your Investments

Too often potential clients come to see us for help in preparing their estate plan and have little to no understanding of details about their investments. Typically, they know the bank where the investment is held. But often unknown or at least fuzzy to them are:

• What type of investment they have: an IRA, a brokerage account, an annuity?
• Whose name is the investment titled in? Individual title, joint title, their individual trust(s), or often, a parent’s trust that they’re actually the beneficiary of?
• If the account is beneficiary-designated, did they complete the beneficiary designations and whom have they named as primary and contingent beneficiaries?
• Their real estate: is it titled in their joint names or individually?

Answers to these questions in large part dictate the legal plan that is appropriate for them. Without knowing these things, the attorney is in the dark. Not knowing these answers also frustrates the potential clients because they want to get the estate plan done, not spend a lot of time buttoning down facts.

Examples of how these facts matter include:

• A trust cannot own an IRA.
• Money passing by beneficiary designation is not subject to a Will or trust.
• Trust funds from a family inheritance pass according to the terms of that trust absent permitted action under that trust such as exercise of a power of appointment.
• Your surrogate financial decisionmaker needs to wear different hats to be able to help you with different investment types you have: ex. Durable Power of Attorney agent, trustee, etc.

Just like going to the doctor with a list of your medications including dosage instructions, going to see your elder law attorney will be much easier for you if you come prepared. We require a list of assets by type, title and amount in our questionnaire. But it is even better, for your own sake, if you understand and have answers to the questions above, so that what we say will make more sense and create the opportunity for deeper understanding of your options. Bring copies of recent bank statements with you if you wish, just like you might bring the bottle of medication with you to the doctor for easy reference.

                We are here for you. We make sure you understand what you get with us. We teach you about the right estate plan for your situation which includes how your assets will pass on your death and during incapacity, which often are dictated by account type, beneficiary designation, and title.