If you’ve done your due diligence to set up a meeting with an estate planning attorney, this is an important first step towards protecting your future. That being said, too many individuals fail to also keep their beneficiaries updated on a regular basis.
Many different assets allow beneficiary designations such as pensions, life insurance, bank accounts, investments, annuities, IRAs, 403(b)s and 401(k)s. If you already have a living trust or will, you might be falling for the misconception that these documents will automatically manage updates for your assets.
If you have a living trust, it is very important to work with your estate planning attorney to make sure that the ownership and/or beneficiary designation of your assets are aligned with your trust and your estate plan (this is commonly referred to as “funding” a trust).
Assets with beneficiary designations are not subject to probate. Instead, they will pass using the beneficiary designation you have already set up with the company. Many people do not realize that these assets are not controlled by a will. The only time that a will gains control over a non-probate asset is if you have not designated a beneficiary or if your estate is the beneficiary.
In recent cases, the Supreme Court has determined that beneficiary designations listed on your retirement accounts, IRAs and insurance policies override beneficiaries in your will in case there are differences between these two documents.
Make sure that you look back over your non-probate assets for beneficiary updates every couple of years. Doing so can help you avoid challenges and minimize the chances that your heirs will end up in a legal battle. Staying on top of your beneficiary designations is important in many ways as you may wish to incorporate new people if you get divorced, remarried or have new children and grandchildren. Schedule a meeting today with your Massachusetts estate planning attorney.
