News and Commentary

Avoiding Basic, and Most Common, Estate Planning Mistakes by Scott Montgomery, CLU, ChFC

If you gathered documents to prepare your annual federal income tax returns, take a moment now to look closely at your financial accounts, how they are titled, and who is named as a beneficiary, before filing those papers away in a drawer.

A mistitled account or lack of a named beneficiary can lead to a wide array of potential problems down the road. For example, assets you assumed were protected from creditors may, in fact, be exposed to legal attack. If you have not updated your retirement plan’s beneficiary designation form, the assets you intend to pass to a current spouse or children may end up in the hands of a former spouse. Moreover, with the recent changes in the tax laws, there is a possibility that an incorrect or outdated financial account could result in unintended estate and income tax liabilities.

Following are some legal and financial issues you should consider in the context of your estate planning.

Account Ownership

Under the law, individuals have options in how they structure ownership of real and personal property, including bank accounts, brokerage accounts and retirement savings accounts. The way in which these assets are titled, especially when they are owned by two or more people, can help to avoid probate at the time of one account owner’s death and limit exposure to potential legal judgments and tax liabilities in the future.

Joint Tenancy with Rights of Survivorship allows for the transfer of property from a deceased owner to pass outside of probate directly to the other owner(s). One benefit of this is that it provides the surviving owner with a step-up in 50 percent of the property’s cost basis, which, among other things may minimize his or her future capital gain tax liabilities. However, joint tenancy with rights of survivorship overrides the expressed wishes in an individual’s will to pass assets to someone other than the co-owner, and it may subsequently create an estate tax liability when the second owner passes away. Therefore, careful planning is essential.

Joint Tenancy by the Entirety applies only to property that a married couple owns together. Because this form of ownership considers the couple to be one single entity, it protects assets from creditor claims filed against one of the spouses and allows property to transfer outside of probate directly from one spouse to the other.

Tenancy in Common often leads to probate issues when one owner dies, because, at the time of death, his or her interest in the property becomes part of his or her estate, where it is passed on to a beneficiary named in the decedent’s will.

Beneficiary Designations

Titling property ownership is not the only way to bypass an individual’s directives for distributing assets contained in a will. Rather, assets will pass directly to those beneficiaries you designate and name directly on retirement accounts and life insurance policies, regardless of what is written in your will. For this reason, it is important to regularly and collectively review your account beneficiary designations, asset ownership titling and wills to avoid conflicts and ensure inheritances go to the intended beneficiaries.


Another strategy for avoiding the very public and costly probate process and ensuring assets pass to intended beneficiaries is to create a trust that allows you to specify how you wish your assets be distributed after you pass away. Once a revocable trust is established, asset ownership should be updated to reflect the trust as the owner. When this is done properly, probate of these assets may be eliminated. Having a trust and not funding it is like having a home with no furniture. It’s nice, but it is not really serving its best purpose.

Every estate is unique and requires a review of each individual’s equally unique needs and goals to optimize plans for building wealth in life and distributing assets to care for future generations after death. Working with experienced financial planners to appropriately title accounts can help to ensure these goals are met while protecting assets and minimizing tax liabilities.

The professionals with Provenance Wealth Advisors work closely with domestic and foreign individuals to assess current financial circumstances and develop comprehensive estate plans that help to overcome complexities and meet desired goals.


About the author: Scott Montgomery, CLU®, ChFC®, is a director with Provenance Wealth Advisors, an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors and Accountants, and a registered representative with Raymond James Financial Services.  For more information, call (954) 712-8888 or email


Provenance Wealth Advisors (PWA), 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.


Scott Montgomery is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC.


Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.


This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James. You should discuss any tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.


The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The estate planning strategies discussed may not be appropriate for every individual.

Pin It on Pinterest

Need More Information?