#49 - Uncommon Yet Critical Parts of Estate Planning
Reluctant Executor News
If you're like most people, you've heard of wills, beneficiaries, and probate. You may even have heard of a trust, but you stop there when you find out there are revocable trusts, irrevocable trusts, charitable trusts, testamentary trusts, special needs trusts, generation-skipping trusts, and more.
My point is, estate planning can get complicated, and many people stop because it seems super complex. And maybe they decide that their estate is simple enough, this complexity isn't for them.
But there are some important aspects that are simple, yet you'll never discover if you stop at the basics. Some of these uncommon, but critical, topics are introduced below.
LinkedIn post from June 20, 2023
Every so often you come across a word that is just fun to say.
Per Stirpes [per stir-peas]
This Latin term, meaning "by branch", often comes up in wills. It designates who will inherit assets if a beneficiary dies before the person who created the will does.
For example, someone can name their child as a beneficiary but include the phrase "…to descendants, per stirpes." This means that if the child dies before they do, that share will then go to the deceased child's heirs, typically the grandchildren.
The opposite of per stirpes is per capita. If an asset is designated as per capita and the beneficiary dies, the asset is then split among the surviving beneficiaries.
But per capita is not as fun to say.
Adding per stirpes or per capita can help clearly state your wishes, which will reduce the chances of family fighting. As always, check with your estate lawyer for formal guidance.
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LinkedIn post from March 3, 2025
Set up an IRA or 401k, and you're blasted with alerts to name beneficiaries.
Set up a bank account, and you need to go through hoops to do the same.
I tried to find out why.
A POD or TOD (payable/transferable on death) is the term used for non-retirement accounts. It is simply naming someone to pass the assets in a financial account to when you die. The assets go directly to the person named, avoiding probate.
Sounds a lot like a beneficiary.
Googling pros and cons for a POD returns lots of results for why you should NOT name a POD.
Googling pros and cons for a beneficiary returns lots of results for whether you should name a trust as a beneficiary or not.
It wasn't until I found a buried FAQ on a Vanguard retirement page that I got an answer: "With retirement beneficiaries, the transfer rules are governed by the IRS—so we're required to offer specific options."
It appears that the IRS drives the need for beneficiaries on retirement accounts. But for non-retirement accounts, banks prefer that you don't name a POD/TOD.
For all of the financial or tax friends reading this, do you shy away from POD/TODs for non-retirement accounts?
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Estate Organization
Once you dive in and start figuring out what estate planning works best for your family, you'll see that it's not as scary as it first seems. And then you'll want to plan even more, trying to make sure your family is prepared for anything.
Reluctant Executor's Estate Organization service walks families through the important things to know beyond your will or trust… the things that most families don't expect yet cause the most stress.
When you're ready to dive deeper into estate planning, schedule some time with me.