Different types of assets can and should get different treatment within your estate. You might assume that leaving equally valued assets to your loved ones is in their best interests, but some assets are more liquid than others. You might leave behind a family vacation home to a child who cherishes it but if it is in their best interests to sell it, this can be a cumbersome and frustrating process.
An executor might also look at liquid assets as the first ones to be sold to raise cash from it. Jointly held assets will go directly to a surviving joint tenant and assets that are subject to liens can be sold to pay off outstanding debt. The executor also has to make important decisions about when to use cash from the estate to pay off the debt and retain the assets.
Life insurance proceeds and retirement accounts are two different types of assets that transfer directly outside of your estate. This means they do not need to go through probate, but this makes it even more important for you to keep up to date beneficiary designation forms filed with each one of those companies. This ensures that if you go through a divorce or have a change in the number of beneficiaries listed on these forms that it can be incorporated quickly.
Ready to discuss building a holistic estate plan and determining if you have enough life insurance to protect your needs? Set aside a time to meet with an estate planning lawyer in Pasadena to learn more.