This article focuses on estate and legacy planning to set the stage for the 4-week Estate Planning Webinar Series. Authors are Jennifer Solf, Musselshell-Golden Valley County Extension Agent, [email protected] and Marsha Goetting, MSU Extension Family Economics Specialist, [email protected].

When organizing an estate prior to death, the Montana legislature has provided tools to allow individuals to have their financial assets pass to people they choose instead of the state and avoid probate, according to Montana State University Extension educators.

Marsha Goetting, MSU Extension family economics specialist, said financial assets can be passed to beneficiaries through contractual arrangements. By listing beneficiaries for financial accounts owners can pass more to their heirs because the cost of probate is avoided.

One way is a payable-on-death designation (POD). Individuals can name whomever they want as a POD beneficiary of their checking or savings accounts, certificates of deposit and U.S. savings bonds. A POD allows a person to keep control of money in their accounts during their lifetime. The beneficiary cannot access the money in the accounts until after death of the owner, then the balance passes to them. There is no probate required for financial accounts passing directly to beneficiaries, said Jennifer Solf, Musselshell-Golden Valley County Extension Agent. You can list your POD beneficiaries on forms provided by the financial institutions.

“Consider naming a secondary beneficiary should your primary one die with you or before you,” Solf added. “Be sure to review the beneficiaries on your accounts and update them when circumstances change such as births, deaths and marriages.”

Another way to avoid probate is a transfer-on-death registration, or a TOD. The Montana Uniform Transfers on Death Security Registration Act allows an owner of securities to register a beneficiary to receive the title after death. A TOD is like a POD, but names a beneficiary for stocks, bonds, and mutual funds. A TOD registration stays with the issuer, transfer agent or broker.

A TOD beneficiary has no ownership rights in your securities while you are alive. Upon death, the securities transfer directly to beneficiaries upon your death. The beneficiaries who inherit stocks, bonds or mutual funds can decide whether to keep the investments or sell them. Generally, TOD forms are on websites of companies where you hold your accounts. Like a POD, you can change TOD beneficiaries by filling out a new form.

Montana law allows for naming family, friends, local community foundations or other charitable organizations as beneficiaries on other financial accounts as well, such as life insurance and annuity policies; 401(k), 403(b) and 457 accounts; individual retirement accounts; and employee benefit plans. Downloadable beneficiary designation forms are often on the website of the company where the account is held or through a company representative.

“Consider beforehand whom you want to receive assets at your death. Then complete the proper legal documents to make sure your wishes are carried out,” Goetting said. “Make a list of assets on which you wish to place a POD, TOD or beneficiary designation.” Goetting added that individuals should either visit their financial institutions and list beneficiaries or have the institution mail the forms to avoid probate fees upon death. During COVID-19, many institutions are allowing you to designate beneficiaries on-line.

A paper copy of the Non-Probate MontGuide may be requested from the Musselshell-Golden Valley County Extension office at 323-2704. PDF is available to download at http://store.msuextension.org/publications/FamilyFinancialManagement/MT199509HR.pdf

Readers can attend the Estate Planning Webinar Series to be offered in January and February 2022. The 4-week series will be offered at the Musselshell-Golden Valley Extension Office on January 18, January 25, February 1, and February 8 from 1 pm-3 pm. Dr. Marsha Goetting will join each session virtually to answer further questions following the viewing of the recorded topics. Contact Jennifer Solf at (406)323-2704 with additional questions.