Beneficiary designations are key to transferring assets.
Do you have an ex-spouse?
Do you want your money to go to him or her when you pass away?
Chances are you do not, but that could happen.
According to a recent WMUR recent article titled “Money Matters: The trump card of estate planning,” the failure to update beneficiary designations can trigger catastrophic unintended consequences.
It is simple.
Folks fail to update their beneficiary designations following major life events and beneficiary designations trump whatever is written in a last will and testament or revocable living trust.
This is this case for many different common assets that pass at death based on the beneficiary designations on file with the responsible financial institution.
So, what beneficiary designations should you review?
Individual Life Insurance Policy
Group Life Insurance Policy
Employee Stock Ownership Plans
Qualified Retirement Plans
Contractual rights under deferred compensation plans
Did you update your last will and perhaps your revocable trust after your divorce?
Great, but you are not done yet!
You will also need to update the beneficiary designations for any of the assets identified above that you may own.
These assets will not go through probate, unless you fail to have designated a beneficiary or the institution provides for a "default" beneficiary under such circumstances.
Divorce is just one reason to update these designations.
Other life events include marriage, death in the family, or the birth of a child.
While you are updating beneficiaries, you should also designate contingent beneficiaries.
Work with an experienced estate planning attorney to ensure everything is in order to meet your goals.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").
Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: WMUR (April 5, 2018) “Money Matters: The trump card of estate planning”