Bank Accounts And Estate Planning: A Guide

According to the most recent data from Consumer Affairs, the average American adult has 5.3 bank accounts. The figure includes checking accounts, savings accounts, and money market accounts. Your bank accounts are an important part of your estate. With the right plan in place, you can set your family up for a smooth, efficient transfer. Here, our Boston estate planning attorney provides a guide to how to prepare your bank accounts in Massachusetts.

Step #1: Identify All of the Bank Accounts that are in Your Name 

First and foremost, you need to make sure that all of your bank accounts tare identified. It is not uncommon for people to lose track of some of their smaller bank accounts as they age. Indeed, you may have simply forgotten to check an older bank account with a relatively modest amount of money—or even a significant amount of money—for many years.  Be comprehensive. Having a full inventory ensures that no assets are overlooked in your estate plan. All bank accounts—and other financial accounts—should be clearly identified as part of your estate plan. 

Step #2: Consider Consolidating Bank Accounts (May or May Not Be Advisable) 

You should evaluate whether consolidating multiple bank accounts could simplify your financial management and estate planning process. Why is it often a good approach? Consolidation might reduce paperwork, improve record-keeping, and make it easier for an executor to manage your estate. At the same, consolidation is not always the right move—diversification across financial institutions might offer protections, such as FDIC limits or privacy concerns. 

Step #3: Ensure that Your Beneficiary Designations are Up-to-Date 

In some cases, the funds within a bank account may not need to go through the formal probate process. Indeed, bank accounts with “payable-on-death” or “transfer-on-death” designations can skip the probate process—or at least they can if the beneficiary information is accurate and up-to-date. With this in mind, you should review these designations regularly to ensure they reflect your current wishes. Failing to update beneficiaries could lead to unintended consequences. Clear and updated designations ease the transfer process.

Step #4: Consider Putting Bank Account or Proceeds Into a Trust 

A trust can be a highly effective estate planning tool. In some cases, you may benefit from putting a bank account—or the proceeds within that account—into a trust. Why use a trust to pass a bank account to heirs instead of beneficiary designation and/or a Will? A trust can offer greater control over how your assets are distributed. For example, a revocable living trust, allows you to access the funds during your lifetime while simplifying the transfer process for your beneficiaries. Trusts can also protect privacy and reduce the likelihood of disputes or problems during probate. They can also be a great option if you want to retain some control over how an heir accesses/uses the funds. 

Consult With Our Boston, MA Estate Planning Attorney Today

At Fisher Law LLC, our Boston estate planning lawyer is skilled, experienced, and committed to helping clients creating the right estate plan that fits your objectives and family dynamics. If you have any questions or concerns about bank accounts and estate planning, please do not hesitate to contact us today for a confidential consultation. Our firm provides estate planning representation throughout the Greater Boston area.

Source:

consumeraffairs.com/finance/how-many-bank-accounts-does-the-average-person-have.html#:~:text=Jump%20to%20insight-,General%20bank%20account%20statistics,has%20decreased%20consistently%20since%202011.