Common Estate Planning Questions (Part 1 of 2): How to Handle Your Assets
When it comes to estate planning, clients often have questions about many different topics. One of the most common areas of confusion involves how assets are owned, titled, and accessed. These details are not just about convenience; they play a critical role in whether assets transfer smoothly to loved ones or create unnecessary legal, financial, and family complications.
In this first installment of a two-part series, I address common questions about asset ownership and management, with the goal of helping you make things as simple and secure as possible for your family after your death.
Q: What’s the difference between joint ownership and a transfer-on-death (TOD) designation?
Joint ownership means that two or more people own an account or piece of property together during life. Each joint owner typically has full access and control. When one owner dies, the surviving owner automatically becomes the sole owner.
While this can seem simple, it comes with significant risks. A joint owner can withdraw all the funds at any time, and the asset may be exposed to the creditors, lawsuits, or divorces of either owner.
Transfer-on-death (TOD) or payable-on-death (POD) designations work differently. You retain sole control of the account during your lifetime. The named beneficiary has no rights or access while you are alive, and the asset transfers automatically upon your death, avoiding probate.
One important caution: whether through joint ownership or a beneficiary designation, the named individual receives the asset outright at death — regardless of age, financial maturity, or broader family dynamics. This can unintentionally create family conflict or place assets in the hands of someone who is unprepared to manage them responsibly.
Q: If I use joint ownership or TOD/POD designations, do I still need a trust?
Relying solely on joint ownership or TOD/POD designations can create serious unintended consequences.
With joint ownership, assets may be exposed to the legal or financial problems of the other owner. There are situations where a family member was added to an account for convenience, only for the asset to later be frozen or garnished due to that person’s unrelated legal issues.
TOD and POD designations avoid that particular risk, but they only function at death — not during incapacity. They also do not protect against unexpected events, such as both the owner and beneficiary dying close together. In those cases, assets may still end up going through probate and passing according to state law rather than the owner’s wishes.
A properly drafted and funded trust can address these risks by providing continuity during incapacity, privacy after death, and more precise control over how and when assets are distributed.
Q: What happens to retirement accounts and life insurance policies when I die?
Retirement accounts and life insurance policies pass directly to the beneficiaries named on the account — not according to your will — as long as beneficiaries are properly designated.
This makes it essential to keep beneficiary designations current. Outdated designations (such as an ex-spouse or a deceased individual) can result in assets passing in ways you never intended. If no beneficiary is named, the asset may have to go through probate.
Naming a minor directly as a beneficiary can also create problems, as courts generally require a formal process to manage those funds until the child reaches adulthood.
Q: Do I need an inventory of my assets?
Yes. An up-to-date asset inventory is one of the most important — and most overlooked — parts of effective estate planning.
Without a clear inventory, loved ones may not know what assets exist, where they are held, or how to access them. Assets that cannot be located often end up with the state as unclaimed property. Tens of billions of dollars in assets currently sit in state unclaimed property funds simply because no one knew how to claim them.
Maintaining a current inventory helps ensure your assets go to the people or causes you choose, rather than being lost or delayed.
Q: How often should I review my asset inventory and beneficiary designations?
Asset information and beneficiary designations should be reviewed regularly and updated whenever your circumstances change. Common life events that warrant a review include:
Marriage or divorce
Birth or adoption of a child
Death of a beneficiary
Purchase or sale of significant assets
Moving to a new state
Starting or selling a business
Retirement
Medical Diagnosis
Regular reviews help ensure that your plan reflects your intentions at the time it matters most.
Q: What’s the best way to organize and store asset information?
Your asset information should be organized in a way that trusted individuals can access if needed. Sensitive information such as passwords should not be included in documents that may become public record. Instead, keep that information secure and clearly communicate how it can be accessed when necessary.
How We Help
As an estate planning law firm, we help clients organize their assets, choose appropriate ownership structures, coordinate beneficiary designations, and maintain updated records over time. The goal is simple: reduce confusion, avoid unnecessary court involvement, and make life easier for the people you care about.
If you would like guidance tailored to your specific situation, schedule a consultation to discuss your options and next steps.
Click here to schedule a call with Emily Hester, Esq.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice.
