Wednesday, June 3, 2009
Retirement Accounts, Life Insurance & Annuities Part 2
The Role of Retirement Accounts, Life Insurance and Annuities in Estate Planning - Part 2
In my last post I set out the general rule in estate planning that all of the assets should be titled in the name of the trust.
I also set out the 3 general exceptions to that rule: Retirement Accounts, Life Insurance and Annuities.
We saw that the reason for the exceptions is that these 3 kinds of assets have beneficiaries designated to receive the assets upon the death of the owner and/or the insured.
In the last post, I discussed retirement accounts.
Now, I will briefly talk about life insurance and annuities.
Life insurance and annuities are closely related to each other. Annuities for the most part are provided by life insurance companies.
An easy definition for an annuity is that it is a hybrid of a life insurance policy and an investment. Although that it is pretty general, it will do for our discussion.
The center-piece of life insurance is the naming of beneficiaries as it is the purpose of life insurance to "benefit" loved ones if the insured passes away.
Therefore, for estate planning purposes, the ownership of the policy is not as important as the naming of beneficiaries.
There are certain situations where ownership is an important factor, but as a general rule the beneficiary designation is the key in life insurance.
If you have a life insurance policy on your life or an annuity, it is wise to periodically review the designations of primary and secondary beneficiaries to see if they are up to date.
DWIGHT EDWARD TOMPKINS, ATTORNEY AT LAW
This blog is intended for information purposes only, and does not constitute legal advice or a substitute for legal advise by a qualified attorney in your jurisdiction.
Copyright 2009 Dwight Edward Tompkins All Rights Reserved
I help people protect their families through affordable, personalized estate planning. Tompkins-Law.com I am in solo practice in Orange County, California where I focus on estate planning, family trusts, living trusts, wills, corporations and business succession planning. I speak Spanish and serve the latino community. Fideicomisos-Testamentos.com