Estate and Business Planning Legal Blog

Friday, December 11, 2020

Consolidating Your Assets to Simplify LIfe

          It is extremely important, especially as one gets older, to consolidate assets, rather than having them scattered at different institutions, in different accounts.  It is quite common for clients to have several bank accounts and/or certificate of deposits, sometimes to earn better interest, and sometimes to also get the $250,000 protection which is available from the government for bank accounts.  The reality is that banks are not going go out of business, so the $250,000 limit should not be a major concern.  Yes, it is important to diversify; however, there are a number of drawbacks.  For one, clients often get overwhelmed with keeping track of the due dates for CDs, who the listed beneficiaries are, etc.  Dealing with banks also generally entails having to go to the banks in person.

         Having assets scattered also causes complications with estate planning and long-term health care planning.  It will mean having to produce bank and investment account statements for all assets, which can be voluminous if the assets are scattered.  Most importantly, is that when a person passes away, it is extremely time-consuming and difficult for the beneficiaries and/or Executors to collect the assets.  If one has several bank accounts, it means the beneficiaries and/or the Executor must deal with several institutions, usually having to appear in person. The job can be quite onerous and frustrating and can cause a great deal of time and expense. Moreover, some assets can be overlooked and therefore escheat to the state because they are uncollected.

What is the solution?  One should, from time to time, compose a detailed list of one's assets.  If there are more than 4 or 5 bank and investments accounts, one should seriously consider consolidating those assets to make everyone's life easier.  In terms of certificates of deposit, most investment companies offer the certificates under the umbrella of a brokerage account, so that you and your family are not dealing with multiple accounts.

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