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Investment Accounts and Estate Planning

Incorporating your investment accounts into your estate planning is a crucial aspect of ensuring that your assets are managed and distributed according to your wishes. As an estate planning lawyer in Folsom, I have seen that many of my clients have a significant portion of their wealth in such accounts. Here are some considerations for integrating investment accounts into your estate plan:

  1. List and Organize Your Accounts:
    • Make a comprehensive list of all your investment accounts, including brokerage accounts, retirement accounts (e.g., 401(k) or IRA), and other investment vehicles.
  2. Beneficiary Designations:
    • Review and update beneficiary designations on your investment accounts. Ensure they align with your current wishes, and consider naming contingent beneficiaries in case your primary beneficiaries predecease you.
  3. Transfer on Death (TOD) or Payable on Death (POD) Designations:
    • Some investment accounts allow you to designate beneficiaries using TOD or POD designations. This allows assets to transfer directly to beneficiaries without going through probate.
  4. Consider Trusts:
    • Depending on your circumstances, you might consider setting up a trust to manage and distribute your investment assets. This can provide more control over how assets are distributed, especially if you have specific conditions or timelines for distribution. This is particularly helpful if something were to happen to your named beneficiaries because it ensures that the assets will always have somewhere to go to. 
  5. Coordinate with Other Estate Planning Documents:
    • Ensure that the beneficiary designations on your investment accounts align with your will, trust, and other estate planning documents.
  6. Tax Planning:
    • Be aware of potential tax implications associated with your investment accounts. Seek advice on strategies to minimize taxes for your heirs, such as utilizing step-up in cost basis for appreciated assets. 
    • This can also include planning for estate taxation, which is levied on estates over $13.61m, as of 2024. 
  7. Durable Power of Attorney:
    • Designate someone you trust with a durable power of attorney to manage your investment accounts and financial affairs if you become incapacitated.
  8. Regularly Review and Update:
    • Periodically review your investment accounts and update beneficiary designations as needed, especially after major life events like marriage, divorce, or the birth of children.
  9. Communicate Your Wishes:
    • Clearly communicate your wishes regarding the management and distribution of your investment accounts to your family members and the executor of your estate.
  10. Seek Professional Advice:
    • Consult with financial advisors, estate planning attorneys, and tax professionals to ensure that your investment accounts are integrated effectively into your overall estate plan.
  11. Consider Gifting Strategies:
    • Explore options for gifting assets during your lifetime to reduce the size of your taxable estate. This can include making use of the annual gift tax exclusion or establishing a gifting strategy within a trust.


By carefully considering and planning for the inclusion of investment accounts in your estate plan, you can help ensure a smooth and efficient transfer of assets to your heirs while minimizing potential complications and tax liabilities. Keep in mind that laws regarding estate planning and taxation may vary, so it’s advisable to seek the guidance of an experienced Folsom estate planning lawyer to ensure that your wishes are followed. If you have any other questions about investment accounts and estate planning, contact Thapar Law at 916-579-0605 or send us a message

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