Not updating beneficiary forms can negate terms of estate plan

Readers in Lee County are likely aware of the importance of having an estate plan and will in order to convey your final wishes. Among other things, a last will and testament indicates how you would like your assets distributed and affairs handled upon your death. Merely having an estate plan, however, does not ensure that all of your holdings will be dispersed as you intend.

Experts are increasingly warning of the necessity of keeping the beneficiary designations on accounts, including banking, company benefit plans, brokerage, life insurance and others, up to date. Often, even if a person has a will or estate plan that specifies otherwise, these types of accounts will pay out to the beneficiaries as they are listed on the designation forms.

In one case, a daughter was reportedly denied the funds from her father’s company savings and investment plan after he died because he had neglected to change the designation form. The $400,000 from the account was awarded to his ex-wife. It was not reported whether or not the ex who received the funds was the mother of the man’s daughter, but she was reportedly granted the funds despite having waived her rights to any portion of the account in their divorce settlement.

There are a number of aspects to a complete estate plan beyond just having a last will and testament. In addition to assisting in drafting estate planning documents, an attorney can help ensure you know if and when beneficiary designations need to be adjusted so that your intended beneficiaries are granted your assets as you wanted.

Source: MarketWatch, “Don’t make this common estate-planning error”, Bill Bischoff, Sep. 17, 2013

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