Ask the Estate Planning Attorney (Answers to Your Questions)
“If probate in Maine is “user friendly” what is wrong with our TOD/beneficiary designation accounts?”
Making sure the people or charities you choose get the benefit of what’s left? TODs and named benies certainly won’t insure that. Yes, they may work, but what if your TOD has a creditor at the time they are getting the property? What about getting a divorce? Frequently our planners develop a “fortress” trust provision for their next beneficiaries. Sometimes we want to provide protection and even structure for these subsequent beneficiaries. Structure means some discretion about how money is spent or saved. What about that kid who inherits an IRA and withdraws the entire account to buy a Porsche? That money could have grown tax-free for many years to come. Oh well.
In answering this question, I didn’t address asset protection for you during your lifetime. In that regard, we only talked about giving someone else the option to do last minute planning if you become mentally incapacitated. This planner did not want to give up any control of any property during their life and capacity. That’s fine. But if they become incapacitated, they can leave the door open for crisis planning if need be.
Stay tuned in upcoming missives about asset protection. You may be surprised at how much control you can keep.
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