What Is Estate Administration? – Ways Assets Can Transfer to the Next Generation

Estate Administration is about how to transfer the title of assets to where they are supposed to go.
This includes where we have assets held, How are they titled, and transferring them to their beneficiaries.
Ways assets can transfer to the next generation include Joint Ownership, Beneficiary Designation, Trust, and Probate. Also, learn about the Lady Bird Deed.

Atty. Chris Berry discusses all this and more in this episode of Daily Wisdom.


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Episode Transcript


What happens when someone passes away?

Hello, everyone. This is Chris Berry with Castle Wealth Group, and on today’s daily wisdom we’re going to talk about estate administration, what has to happen when someone passes away? If you like this information, please subscribe to our YouTube channel so you can be notified when we provide more education.

Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications such as Ford’s, Kiplinger’s, Crain’s Detroit, and more. He’s the host of the weekly radio show and podcast, The Chris Berry Show. He’s a national thought leader as it relates to retirement and legacy planning, and has authored the Amazon best-selling book, The Caregiver’s Legal Guide.

With that, we’re going to talk about estate administration. So what happens when someone passes away? Well, generally, the first thing is that we need to contact the funeral home because they’re going to start the process of getting us death certificates. With those death certificates, now we can start the estate administration process. Really, it’s broken down into first looking at where we have assets held, how are they titled, and then transferring them to whoever they’re supposed to go to.

When we’re doing estate administration, at the end of the day, there’s really only four ways that assets can transfer to the next generation or to whoever the beneficiaries are. So first would be through joint ownership. Now, joint ownership is great for a married couple. So if we have husband and wife, husband passes away, goes to the wife, very clean. A lot of times we see this on things like real estate, or checking accounts, or brokerage accounts, or savings accounts. But I would not recommend naming anyone else jointly to your assets because you’re opening yourself up to a whole nother can of worms, because if they get a divorce, lawsuit, creditor action, bankruptcy, et cetera, you might lose that asset.


Beneficiary Designations

Second would be beneficiary designations. So this would be like life insurance, 401(k)s, IRAs, goes to whoever you’ve named as a beneficiary. Third would be through a trust, and there’s different types of trusts. There’s asset protection trusts, like a castle trust, that avoid probate, control the distribution upon death, but most importantly, build in asset protection, protecting you, the grantor, or the person that created the trust from creditors, as well as from long-term care costs. More specifically, that nursing home or Medicaid spend down.

Then fourth, we have probate. Typically, we want to avoid probate because it’s a court process, it’s time consuming, and it’s costly. What you notice I didn’t mention is I did not mention a will, because a will does not avoid probate. What a will does is gives instructions to the probate court how to administer your estate. So if you’re looking at avoiding probate, which is a lot of people’s most common estate planning goal, or the first goal they have, they want to make it as easy as possible on the beneficiaries, then understand we don’t want to rely on a will, because all a will does is gives instructions to the probate court. So instead, you would want to rely on either joint ownership, beneficiary designation, or trust.

If you are not moving towards a trust-based estate plan and you want to avoid probate, a big thing to take into account is, what are you doing with your real estate, because bank accounts can have transfer on death designations. Life insurance, retirement accounts typically are going to name a beneficiary. But the big issue is, how do you handle that real estate? Again, you don’t want to rely on joint ownership for a variety of reasons.


Lady Bird Deed

Instead, we might do something called a Lady Bird deed, which is technically an enhanced life estate deed. It’s named after Lady Bird Johnson, and basically, what a Lady Bird deed says is that it’s in your name while you’re alive. You can do whatever you want with it. You can sell it while you’re alive. But then if you were to pass away, then it goes to whoever you’ve listed as a beneficiary on that deed. That’s what a Lady Bird deed is. So that’s a way that you can remain in control of your real estate without naming anyone jointly to it, and then upon death, it goes to whoever you’ve named on that Lady Bird deed, thereby avoiding probate.

So hopefully this was helpful. Again, understand estate administration is really joint ownership, beneficiary designation, trust, and if it doesn’t pass through one of those first three ways, then it ends up going to probate. If you liked this information, please make sure to subscribe to our channel. Thank you so much.

Castle Wealth Group has clients across the nation and helps families plan, protect and preserve what is important by creating a retirement and legacy blueprint.




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