People who unwisely advocate do-it-yourself estate planning will try to point out some of the ways that you can transfer assets to your heirs simply. These individuals will often talk about payable on death or transfer on death accounts, but before you buy into their notions you would do well to understand the limitations of these accounts.
A payable on death account is somewhat self-explanatory. When you open the account at a bank or brokerage you name a beneficiary. In the event of your death this beneficiary assumes ownership of the resources in the account, and this transfer of assets takes place outside of the probate process.
The above sounds pretty good, but there are cons as well. For one, a lot of people would want to devise an estate plan that included the freedom to give different amounts of money to different heirs. With these accounts you are often required to give the same percentage to each beneficiary if you do include multiple beneficiaries.
In addition, there is no way to make provisions for the possibility of incapacity. And, because you own the assets personally throughout your life there is no asset protection afforded with these accounts.
The best way to proceed when you are making preparations for the future is to consider all your options with the benefit of professional guidance. Should you be interested in doing so, right now would be a good time to pick up the phone to arrange for a consultation with a Hartford estate planning lawyer.