by Debra Robinson

In 26 years as an estate-planning and probate lawyer, I have seen the same costly mistakes over and over again. People fill out beneficiary designations and co-own real estate or other assets without understanding how their choices will impact their families.

Minor Children as Beneficiaries

Children under the legal age of majority (age 18 in Georgia) can not legally manage assets. If you name a minor as beneficiary of life insurance, retirement assets, or payable on death accounts; or if you name a minor inyour Will, or die without a Will with a minor child; you will cause unnecessary costs and delays. Someone will have to be appointed as Conservator by the Probate Court to manage assets left to the child. The prospective Conservator must pay for a surety bond and wait for Court approval before gaining access to the assets. Once appointed, a Conservator must provide annual accountings to the Court, obtain Court permission to sell or mortgage the minor’s property, keep the child’s investments in government bonds, cash or CDs, and distribute everything to the child at age 18.

You can include minor children in your estate plan without involving the Probate Court by designating a custodial account as beneficiary or by creating a trust. With a trust, you can delay the age at which the child will get control until 25 or 30, or even older.

Failure to Change Beneficiaries

Many people have multiple IRA’s, 401ks, and life insurance policies. As the years go by, and circumstances change, they fail to change their beneficiaries. If you get married or divorced, you should review your beneficiary designations. Is an ex-spouse named as beneficiary of your life insurance? Even if you’ve remarried, your exwill get the check. The beneficiary designation to your ex-spouse will control the insurance payment even if you name your current spouse as beneficiary under your Will.

Look at each of your accounts and plans periodically to make sure the beneficiary designations are current.

Joint Ownership of Real Estate

People assume that joint ownership of real estate means that at the first death, ownership will pass to the survivor. Not always. It depends on the words in the deed. In Georgia, unless the deed specifically creates ownership with right of survivorship, having two or more owners just means each owner owns a percentage of the property. So when one owner dies, that share will pass according to his or her Will, or the intestacy laws if there is no Will.

If you own your residence jointly, do you know what will happen when your co-owner dies? Find a copy of your Warranty Deed and look for the “with rights of survivorship” language. If the ownership isn’t with right of survivorship, that can be corrected by a Quitclaim Deed. State laws differ, so if you co-own real estate outside of Georgia, the rules of that state will apply.

Joint Bank Accounts Across Generations

Putting children’s names on bank accounts as joint owners can have bad consequences. If an elderly mom with a son and daughter adds her daughter’s name to her accounts so her daughter can help manage her finances, what happens to those funds when Mom dies? Even if Mom’s Will divides her estate equally between her two children, the daughter gets everything in those joint accounts.

If Mom needs help with check writing, there are better methods. Mom could designate her daughter as agent under a Financial Power of Attorney, or create a Revocable Living Trust, with the daughter as Co-Trustee.

Good estate planning requires more than having a Will. Without careful attention to beneficiary designations and joint ownership, you could be making a mistake that will cause your heirs increased expenses, lengthy delays, and possible disinheritance.

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Debra Robinson is an Alpharetta attorney specializing in estate planning.

Contact her at 770.817.4999. or drobinson@robinsonmiller.com