Daily Money - The Pros and Cons of Reverse Mortgages

TIMELY RETIREMENT NEWS, INSIGHTS, AND ADVICE

RETIRE WITH MONEY COMMUNITY INSIGHTS

This week, members of our Retire with Money Facebook group discussed estate planning. One member asked, "Is there any advantage to putting my bank and financial investment accounts into a trust, or would it be simpler to just do a “transfer on death” (bank account) and name beneficiaries (investment accounts)."

This is a great question. I'm no lawyer, so I'm not going to get into the fine points of people's answers. I do know that a big benefit of revocable living trusts is that they can help your heirs avoid probate, a process that can be costly and time consuming (not to mention, public). One expert in the group offered this cautionary remark about trusts, though: "I work for a title company and I cannot tell you how many times people -- spouses, children, relatives near and far -- forget to add some asset to the trust, and there you are in probate court. Just a reminder that the process of setting up a trust is not a 'one and done.' It really does need to be managed. "

Another point that folks mentioned that bears repeating: your beneficiary designations on your retirement accounts override anything in your will. So if you have your sibling, or your first spouse, listed as a beneficiary on an older 401(k), they stand to inherit that money even if your will is updated. It's always a good time to make sure your beneficiary designations are current.

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Elizabeth O'Brien is deputy editor at MONEY. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at elizabeth.obrien@money.com and follow her on Twitter at @elizobrien.