Why asset consolidation can help your estate planning

Important life decisions become even more crucial as you enter middle age. You likely have already implemented New York estate planning for your children, perhaps by setting up a will that leaves your assets and property to them when you pass away. However, it is possible that not all of your assets may end up in the hands of your loved ones. If you are not careful, some assets might slip through the cracks.

As Forbes points out, people accumulate a lot of assets over a lifetime. People in middle age have probably changed jobs several times and in the process have opened up different retirement plans at those jobs. You might have left several accounts floating around that you may not remember or do not regard as important since they have not reached maturity yet. Additionally, you may have made a number of small investments or own pieces of real estate. Over the years, these investments can add up.

The danger in holding so many investments is that you pass away without leaving your heirs paperwork that documents it all. The more investments you hold, the greater the possibility that one or more of them will be neglected or forgotten on your estate planning paperwork. Thus after your passing, your children will not even know that some of your investments or accounts exist and will not think to look for them. There is also no guarantee that they will be found during the process of probate.

One solution is to comprehensively list all of your assets in a will and make sure in writing that they pass on to your children. However, it may be better to consolidate your assets and financial accounts. You could consider selling off real estate holdings, or selling off investments that are not likely to yield a strong return. This makes managing your estate much easier, plus the probate process will go more quickly when the time comes. 

Another way to make sure some assets do not go missing is to set up a “pour over” will. Findlaw describes pour over wills as something you can add to a trust if you have set one up. This kind of will states that upon your passing, all assets that are not in your trust will be moved over to the trust. For example, if you own real estate in or outside the state of New York, a probate court will move that real estate into your trust, where it will be distributed as you instructed. This will help avoid lengthy probate proceedings and make sure your heirs receive your assets without long delays.