Prince and Heath Ledger didn’t have their affairs in order, but you should.

Following his death in 2016, Prince made headlines when it was discovered he died intestate –
without a will or other estate planning documents governing the disposition of his $156 million estate, which
included $6 million in cash, his Minnesota Paisley Park estate, and the rights to his music. Because of this
oversight, Prince’s assets were the subject of a six-year court battle between his siblings, Primary Wave (a private
equity group), and countless other claimants.

However, estate planning professionals know having a valid will is not enough to overcome
inadequate planning. That was the case with the late actor Heath Ledger who never updated his will after his
daughter, Matilda, was born. When he suddenly passed away in 2008, his $20 million estate passed to the named
beneficiaries in his will, his parents and siblings. While Matilda was luckier than most, as the family chose to
make her the sole beneficiary of her father’s estate, doing so can involve significant legal costs and potential tax
consequences.

The lesson here is that having wealth and access to resources like estate planning professionals
is not enough to prevent costly estate planning mistakes, not to mention potential harm to family relationships.
That’s why it’s important to put a plan in place and review it regularly as federal and state tax laws, and your
personal goals and life circumstances change over time. Below are four important things to keep in mind when it
comes to estate planning.

1. Make sure to fund your revocable trust

Due to the significant flexibility and protection they offer, revocable, or “living,” trusts are
often advised by estate planning professionals and can play an important role in fulfilling your family’s goals. A
revokable trust can be altered as often, and at any point during the trustee’s lifetime. However, the trust becomes
irrevocable upon the death of the trustee(s).

A revocable trust provides for the organization and management of your assets during your
lifetime, including any periods of incapacity. They also offer privacy, continuity of asset management, and certain
tax advantages for you and your heirs. Estate planning professionals know one of the most important benefits of a
trust is the ability to avoid the court-supervised probate process that your estate would otherwise be subject to if
you only have a will (or no will) at the time of your death.

However, trusts are only beneficial if they’re funded. Unfortunately, many people forget to
retitle or transfer assets to fund the trust. While estate planning professionals, including your legal, tax and
financial advisors, may assist you with the initial titling of assets, it’s important to remember to title any new
assets or accounts you acquire to the trust. With certain exceptions, assets titled outside of the trust can be
subject to probate following the owner’s death, or if they contain beneficiary designations, those designations may
not be in line with the terms of your trust.

2. Consider a transfer-on-death designation

Estate planning professionals may recommend transfer-on-death (TOD) and payable-on-death (POD)
designations that allow certain property (TOD) and financial accounts (POD) to immediately transfer to the named
beneficiary without the need for probate court approval, regardless of whether or not you have a will. These
designations are limited to certain types of assets, such as boats and automobiles in some states, and bank savings,
brokerage accounts, and certificates of deposit (CDs). Best of all, you can set up a TOD or POD beneficiary
yourself, without the assistance of an estate planning attorney or other estate planning professionals. Keep in
mind, the beneficiary that you name has no rights to the property as long as you are alive. You are free to change
beneficiaries as often as you like.

3. Create contingency plans for beneficiaries

Much like your will is a contingency plan for death, your will should also have its own
contingency plan with the help of your estate planning professionals. For example, let’s say you intend to transfer
estate assets in equal portions among your three children (referred to as “per stirpes” in legal terms). If one of
your children were to predecease you without this designation or contingent beneficiaries named, such as their
spouse or children, the assets would instead be redistributed among the remaining two siblings, rather than pass to
the deceased’s heirs. So without estate planning professionals, these missing details can have significant
consequences. In the event of a dispute, the disposition of assets like insurance policies, retirement accounts, and
land could be subject to the state court’s decision-making authority, instead of being distributed according to your
wishes.

4. Understand the pitfalls of joint ownership

Certain assets, like real estate and personal or business bank and investment accounts are often
held jointly between spouses, a parent and their adult child, or business partners. These assets are full of complex
layers that your estate planning professionals can help you navigate.

When assets are titled as joint tenancy with rights of survivorship (JTWROS), each owner has a
co-equal and undivided share of the property or assets (which is different from joint tenancy in common where each
person has a divided interest in their share). As a result, upon the death of one owner, the assets automatically
pass to the co-owner, without the need for a trust or probate proceedings. While that’s a pretty seamless way to
transfer assets upon the death of one owner, there are additional factors estate planning professionals will ask you
to consider when titling assets in this manner.

For example, shared ownership exposes an asset to any claims from the co-owner’s creditors and
could inadvertently open access to some of personal assets held in your name, like bank or brokerage accounts.
Owners also have the ability to access or sell certain jointly held assets without the consent of the other party,
such as money held jointly in a bank savings or checking account.

Holding property jointly, as an estate planning professional knows, can also prohibit you from
completing certain types of transactions, such as selling a home or vehicle, or using the asset as collateral,
without written consent from the co-owner. And without adequate planning, joint ownership can have consequences
where estate, gift, and income taxes are concerned. When a non-spouse is named in JTWROS, an intended gift is also
made which could lead to gift and estate implications.

How Return on Life Wealth Partners can help you get started

At Return on Life Wealth Partners, our experienced wealth advisors will work directly with your
tax and legal professionals to coordinate and implement your tax, wealth and estate planning strategies. Our team of
estate planning professionals, which includes a Certified Exit Planning Advisor (CEPA), has the experience and
expertise to help you create a customized plan aligned with your estate, tax, philanthropic, retirement, and
business exit planning needs. At Return on Life Wealth Partners, we believe it’s your money, your life, your way.
That’s why our approach is exclusively focused on helping you achieve a life well lived on your terms.

Start the new year on the right financial footing. Find out how we can help you avoid costly
mistakes as your estate planning professionals and put a plan in place to help protect and grow your wealth for
generations to come. Contact us today for a
free consultation.

About Return on Life Wealth Partners

Return on Life Wealth Partners is an independent Registered Investment Advisor (RIA) founded in
1994 with headquarters in Cleveland. The team provides comprehensive wealth planning services to individuals,
families, and business owners. By examining clients’ lives before their money, Return on Life® aligns its advice
with clients’ values. With access to its Complete Family Office (CFO)ˢᴹ and Personal CFO™ services, Return on Life
Wealth Partners aims to help clients achieve the milestones that matter most to them. This personalized approach
also extends to the institutional and corporate retirement plan services available through 401(k) Prosperity.®

This article is meant for informational purposes only and is not intended to serve as a
recommendation or substitute for specific individualized advice. We suggest that you discuss your specific tax
and/or legal issues with a qualified advisor. Investment advice offered through Planned Financial Services, a
Registered Investment Advisor. Copyright © 2023 Planned Financial Services, LLC. All Rights Reserved