A major focus of estate planning is to ensure that there's a coordinated, coherent, and unified distribution of your assets. That is, you should have a relatively clear idea of who gets what after you pass away.

Many times people confuse exactly which assets get distributed in accordance with their Will. For example, if Bill created a Will where he says he leaves everything to Jessica, Bill may believe that Jessica will get all of his assets when he passes away. However, some assets are not controlled by the Will (i.e., nonprobate assets), and to the extent that Bill has those types of property, extra steps need to be taken to ensure that they go to the appropriate people.

Here's a rundown of some of these types of assets:

1. Joint Tenancy Assets - Any asset held as "joint tenants" or "joint tenants with right of survivorship" with others will automatically pass to the surviving joint tenants upon death. 
2. Community Property With Right of Survivorship - In California, married couples may hold some assets as "community property with right of survivorship". This operates similar to joint tenancy in terms of having property pass to the survivor.
3. Revocable Transfer on Death Deed - This is a special type of deed, which allows real property to be transferred automatically to designated beneficiaries upon the owner's death.
4. Pay-on-Death Accounts - Some types of bank accounts allow you to name a beneficiary to receive the account after the owner passes away.
5. Life Insurance - The proceeds from life insurance are payable to the beneficiaries that the policy owner(s) have named.
6. Retirement Accounts - Similar to life insurance policies, retirement accounts get paid to the beneficiaries that the owner(s) have named.

It's easy to lose track of all of these assets, especially if for example, you've switched jobs a number of times and have multiple 401k accounts with various employers. However, to have a clear and unified estate plan, it's important to have a thorough understanding of who will receive each of your assets at the time of your death, since the Will controls the disposition of only certain types of property.

There are a whole class of assets that pass without the need for probate, if you've properly named beneficiaries on those accounts. These include life insurance policies, pay-on-death accounts, and retirement plans (e.g., IRAs, 401ks, etc.).

If you acquired any of these assets during marriage, and absent an agreement between you and your spouse to the contrary, each spouse should have a 1/2 interest in each since they would be considered community property. Therefore, even if you've been funding your 401k plan at work with your salary, because that salary is considered community property, your spouse has a 1/2 interest in the account.

Because the law recognizes the community property nature of these assets, if you want to name a beneficiary for your 401k (other than your spouse), your spouse must consent and typically must also sign the beneficiary designation form waiving his or her right.

Check out California Probate Code Section 5020, which states:

"A provision for a nonprobate transfer of community property on death executed by a married person without the written consent of the person’s spouse (1) is not effective as to the nonconsenting spouse’s interest in the property and (2) does not affect the nonconsenting spouse’s disposition on death of the nonconsenting spouse’s interest in the community property by will, intestate succession, or nonprobate transfer."

If you're like many clients, you have probably never checked on the beneficiary designations on assets such as life insurance policies or retirement accounts since you acquired them. You might have acquired some of those accounts before you got married and named your parents or a sibling as the beneficiary.

Part of the estate planning process should entail you reviewing assets which are transferred by beneficiary designation to make sure they are up to date.

Many people get tripped up on the steps that need to be taken after an estate plan has been set up. For those with simple estates, there may not be much to do after meeting with the estate planning lawyer to sign the documents. For others, additional steps need to be taken to ensure that the estate plan will be fully functional once they become disabled or pass away.

Wills

If your estate plan utilizes a Will as the primary tool to transfer your assets, you're basically done after it's been signed and witnessed. You might have assets that are held as joint tenants that need to be updated or beneficiary designations on assets such as life insurance policies and/or retirement accounts that may need to be revised, but generally speaking there's not too much ongoing maintenance. (Although it is still good to periodically review your Will to make sure that you are distributing your assets to the appropriate people or organizations in your life.)

Revocable Living Trusts

Re-titling Assets

If your estate plan utilizes a Revocable Living Trust, then there are still additional steps that need to be taken to ensure that the trust is what governs the use and transfer of your assets. The primary focus here is on ensuring that assets (other than those that utilize beneficiary designations such as life insurance policies or retirement accounts) are re-titled in the name of the trust. Usually, this means that your property, which you might have previously owned as "John Doe, a single man" will now be owned as "John Doe, as Trustee of the John Doe Living Trust dated January 1, 2018". You will want to change the title to bank accounts, brokerage accounts, real estate, interests in any business entities (e.g., stock or membership interests in an LLC) accordingly. You will also want to revise the beneficiary designations on life insurance policies and/or retirement accounts. 

Beneficiary Designations

For life insurance policies, we generally recommend listing your trust as the primary beneficiary, the idea being that the proceeds from the policy should be distributed in accordance with the wishes stated in your trust. For retirement accounts, spouses will often name each other as the primary beneficiary, and then name their trust as the secondary beneficiary. The purpose for the different approach here is that the law allows for surviving spouses to convert retirement accounts for which they are beneficiaries into a "spousal rollover IRA", which then permits the spouse to continue tax-deferred growth of the retirement account. The trust is named as a secondary beneficiary so that the retirement account can escape probate after the surviving spouse passes away. Single individuals may name their trust directly as a primary beneficiary.

Business as Usual

Making sure that assets are re-titled in the name of the trust and that appropriate beneficiary designations are updated, can be the most time-consuming and frankly annoying part of the estate planning process. After it's done, there's generally no difference in how you live your day-to-day life, and things such as income tax returns and other obligations continue to be the same as they were before you created your estate planning documents.