• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • Speaker Connection
  • Services
    • Asset Protection & Business Planning
    • Elder Law & Medicaid Services
    • Estate Planning Services
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Wills & Trusts
  • Elder Law
    • Coping with Alzheimer’s
    • Guardianship and Conservatorship
    • Medicaid Crisis Planning
    • Medicaid Planning
  • Seminars
  • Webinars
  • Resources
    • Communities We Serve
      • Keller, Texas
    • Elder Law Resources
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
    • Estate Planning Resources
      • 3 Reasons to Create a Trust
      • Estate and Gift Tax Figures
      • Estate Planning Articles
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Estate Planning Worksheet
      • Is Your Estate Plan Outdated?
    • Free Consultation
    • Free Estate Planning Seminars
    • Frequently Asked Questions
      • Estate Planning
      • Trust Administration & Probate
    • Newsletters
    • Our Client Care Program
    • Pre Consultation Form
    • Professional Resources
      • Educational Alerts
  • Reviews
    • Our Reviews
    • Review Us
  • Contact Us
  • Blog

McGee Law Firm

Your Resource for Estate Planning, Elder Law and Medicaid / VA Planning

Call Us Today 817-899-3286
  • Facebook
  • Instagram
  • LinkedIn
  • YouTube
Attend a Free Seminar
Home / Estate Planning / Basics of Estate Planning: Lack of Coordination

Basics of Estate Planning: Lack of Coordination

June 18, 2020 by Brandon McGee

Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,
American Academy of Estate Planning Attorneys, Inc.

This is another in a series of blogs on the basics of estate planning.

Perhaps the most common mistake in estate planning is a lack of coordination. This is not where the client, attorney, or advisor cannot walk and chew gum at the same time. This is a failure to consider all the different aspects of a plan and how they may (or may not) work together.

An ever-increasing share of an individual’s wealth is controlled by beneficiary designation.

These may take the form of:

  • Real estate controlled by a beneficiary deed
  • IRAs
  • 401ks
  • Life insurance
  • 529 plan
  • Brokerage account with beneficiary designation
  • Bank account with beneficiary designation

The client may have thought they were being proactive by putting beneficiary designations on many of their assets. Let’s say they’ve executed a beneficiary deed on their house with their daughter, Susan, as the beneficiary. Let’s say their brokerage account designates their son, George. The IRA names their son, Bobby, directly.

Years later, the client decides to get a will and seeks the help of an attorney. The client tells the attorney they want a simple will leaving everything to their son, Bobby, because he’s been caring for them for years now. The attorney could draft a will-based plan leaving all the client’s assets to the son. It may be a well-crafted plan and keep the assets in a testamentary trust for the son, maybe providing divorce or creditor protection, if appropriate.
However, the only thing Bobby would get would be the IRA. Further, the IRA going to Bobby would not have creditor protection under federal law (though in places it might have protection at the state level).

This underscores the importance of clients telling their attorneys what they’ve done in the past and consulting with their attorney before moving assets in the future. If the attorney had drafted and funded the assets into a trust, this would have avoided the problem. Of course, the problem could still exist regarding assets not funded into the trust or later acquired in the client’s name individually. However, if a will were used as the primary planning vehicle, the attorney may not have known of the beneficiary designations. The will only controls the items which are in the client’s name upon death. Items with a beneficiary designation transfer to the beneficiary upon death and are not part of the probate estate and not controlled by the will. Similarly, items in joint tenancy pass to the surviving joint tenant by operation of law and are not controlled by the will.

A well-drafted will or trust is only one aspect of a good estate plan. There’s nothing wrong with using beneficiary designations where appropriate. But, the designations must be coordinated with the rest of the plan.

An upcoming blog will look at another common mistake in the planning process.

  • Author
  • Recent Posts
Brandon McGee
Brandon McGee
Brandon McGee enjoys a successful law practice focusing on estate planning, elder law, Medicaid preplanning and crisis planning, and probate. Brandon and his team combine legal skills with compassion and understanding to develop estate plans that are personalized to the needs of each of their clients.
Brandon McGee
Latest posts by Brandon McGee (see all)
  • Medicaid Planning: There’s a Right Way and a Wrong Way - March 23, 2023
  • Preparing Your Estate Plan: What You Need to Know - March 22, 2023
  • What Happens When You Don’t Trust Your Trustee – Part II - March 21, 2023

Filed Under: Estate Planning, Legal Education

About Brandon McGee

Brandon McGee enjoys a successful law practice focusing on estate planning, elder law, Medicaid preplanning and crisis planning, and probate. Brandon and his team combine legal skills with compassion and understanding to develop estate plans that are personalized to the needs of each of their clients.

Primary Sidebar

Blog Subscription

Sign up for our estate planning blog to receive all of our latest news and updates!

  • This field is for validation purposes and should be left unchanged.

Follow us

  • Facebook
  • Instagram
  • LinkedIn
  • YouTube

TESTIMONIALS

Client Review
May 25, 2021
    

Brandon McGee is knowledgeable, experienced and professional regarding Estate Planning. The entire process of multiple meetings to establish our input, draft and sign documents and fund the Trust were well organized and clearly explained. At completion, we were presented with a very well organized binder with the documents (both paper and electronic) and lists for future action.  In short, we find Brandon McGee and his staff to be competent, professional and friendly. ~ Brian C.

default image
Brian C.

Fort Worth Address

Fort Worth
810 W. 10th Street
Fort Worth, TX 76102
United States (US)
Phone: (817) 899-3286
See Larger mapGet Directions

Fort Worth Map

map

Southlake Address

Southlake
101 River Oaks Dr., Ste. 110
Southlake, Texas 76092
United States (US)
Phone: (817) 899-3286
See Larger mapGet Directions

Footer

  • Advantages of Working With our Firm
  • About the American Academy
  • Disclaimer
  • Sitemap
  • Contact Us

Connect to Us

  • Facebook
  • Instagram
  • LinkedIn
  • YouTube
footer logo

© 2023 McGee Law Firm
All Rights Reserved