Establishing an estate plan is an important aspect of a comprehensive and well-rounded financial plan.  A good estate plan will help ensure your wishes are carried out if you become incapacitated or die.  It will help the people you place in charge of your estate to make appropriate decisions for your care if you are living but unable to handle your own affairs and distribute the things you leave behind according to your wishes.  It will also help expedite your estate through probate or possibly avoid it completely. 

An estate plan can be quite simple, very complex and everything in between.  It should be custom tailored to you and drafted based on the laws of your state of residence.  I strongly encourage my clients to have an attorney that specializes in estate planning help them establish an estate plan if they don’t have one and if they do have one that was drafted out of state, to have it reviewed and possibly amended to comply with Arizona law.  Also, if you have an estate plan but haven’t had it reviewed in the last few years or if you have experienced a life changing event like the loss of a loved one or a divorce, it is a good idea to have your plan reviewed. As a result of working over the years to ensure my clients financial plan, tax plan, and estate plan all work together I have met and cooperate with several very nice, professional, and capable estate planning attorneys that I routinely refer my clients to.  If you are interested, contact me at

Because we are human; things that cost money, take time, and deal with our death or incapacity are often times placed on the back burner.  With that in mind, a good first step that won’t cost money or take too much time is to review your retirement accounts and insurance policies to make sure you have assigned a beneficiary.  Assigning proper beneficiaries to these accounts and policies should avoid the need for them being probated.  

Here are a few things to keep in mind about beneficiaries.  First, always name a primary beneficiary or beneficiaries but, also try to name a contingent as well.  This is who the account or policy will go to if the primary beneficiaries pass away before the assets are distributed to them.  Don’t name a minor child as beneficiary because minors can’t receive or control assets for their own benefit so this will not avoid probate.  The court will appoint someone to control the money on the minors’ behalf until they reach the age of majority.  Consult an attorney and consider very carefully the ramifications of appointing a Trust as beneficiary especially on a 401k plan.  Unless there is very specific verbiage in the trust, the 401k may be liquidated and disbursed upon your death creating a huge tax liability for the survivor whereas if you name a person as your beneficiary, the 401k can be rolled over to a stretch IRA where the distributions and therefore the taxes can be stretched over many years.

If you have not reviewed your beneficiary designations recently, now may be a good time.  During client beneficiary reviews over the years I have found large life insurance policies and retirement plans with an ex-spouse listed as the beneficiary.  This is fine if it is done deliberately but usually it’s an oversight that fell between the cracks during the divorce only to be uncovered upon the death of the owner creating an awkward situation between wife number one and wife number two.  While this might make for an entertaining funeral for friends and family, you should work to avoid the situation in the first place by updating your beneficiary designations. 

Another common way beneficiary designations become inaccurate is a single adult child may name their parents as beneficiaries on a life insurance policy or retirement account, the parents pass away leaving the account or policy with no beneficiaries. However it occurs, it is easy to remedy by contacting the financial institution and requesting a beneficiary change form, filling it out and sending it back in.  

Having proper beneficiary designations on your retirement accounts and insurance polices isn’t the endgame when it comes to estate planning but it’s a good place to start!  If you would like to learn more, send me an e-mail and I’ll send you a report titled, “Understanding Beneficiary Designations – 10 things everyone should know”.


(Editor’s Note: Chad Winn is a financial advisor for Wells Fargo Advisors. To reach Chad, call 584-3017, or email at

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