Is Your Account Titled the Right Way?

Most parents don't want to be a burden on their kids.

They save for retirement. They buy long-term care insurance. They set up a living trust.

But many overlook one simple thing. How their accounts are titled.

It doesn't seem like a big deal. 

Until a stroke, a fall, or a dementia diagnosis happens and your family can't get to your money.

Here are four common mistakes we see.

Your living trust doesn't cover everything. 

A trust only controls accounts titled in the trust's name. 

If your bank account is still in your own name, the trust doesn't help. 

Your IRA and 401(k) are different. 

They pass by the beneficiary form, not your trust or your will.

A Power of Attorney is not a beneficiary. 

A Power of Attorney lets someone act for you while you’re alive but can't make decisions yourself. 

A beneficiary gets the account after you pass. 

One has no power after you die. The other has no power while you're alive. 

You need both.

The bank may not accept your paperwork. 

Many banks and brokerage firms have their own rules. 

Some won't take an old Power of Attorney or want their own forms filled out. 

It's much easier to get this on file before you need it than in the middle of a crisis.

You could accidentally cut out your grandkids. 

Say you leave your IRA to your three kids and one passes away before you. 

Depending on how the form is filled out, that share could go to your other two kids. Not to that child's own children.

So what happens if accounts aren't titled right?

If you can't make decisions and no one has legal access to your accounts, your family may have to go to court. 

This is called a conservatorship. It can take months, cost thousands in legal fees, and a judge gets involved in your money.

Meanwhile, the bills still need to be paid. Often your kids end up covering them out of their own pockets.

If you pass away and an account isn't in your trust or doesn't have a beneficiary, it may have to go through probate. 

In California, probate often takes a year or more. The fees are set by state law and can be expensive. And the details become public record.

If your IRA has no beneficiary, it usually goes to your estate. 

That can mean probate, and the tax rules for your family can be less flexible.

And your money may end up with someone you never intended.

The kindest thing you can do for your family is set up your documents correctly.

Your kids will already be dealing with a lot if something happens to you. 

Worry. Doctor visits. Hard decisions.

The last thing they need is a fight with the bank or a court date.

These mistakes are easy to fix. Most people just never check.