Financial institutions and brokerage firms occasionally recommend that client accounts be structured as joint or beneficiary-designated accounts without full consideration of the impact on the client’s estate plan.
Failure to coordinate closely with the client’s estate plan may prove costly, and this is especially the case when the client’s Will and/or Trust Agreement provide for a series of specific cash bequests to named beneficiaries.
Many clients are advised or are under the impression that establishing beneficiary-designated accounts will avoid estate or inheritance taxes and will reduce probate court fees. However, the establishment of such accounts does not reduce or eliminate estate tax or Connecticut statutory probate fees.
Posted by Anthony Tran, Associate Editor, Wealth Strategies Journal