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Coordinate Your Will and Non-Probate Assets’ Beneficiary Designations

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A Will is only one part of a comprehensive estate plan.  Make sure the beneficiary designations for your non-probate assets are coordinated with your Will to ensure that the appropriate persons inherit from you.

The distribution of non-probate assets, such as investment/retirement accounts and proceeds from life insurance policies, is dictated solely by the beneficiary designations on file with your banker/broker and life insurance company – not your Will.  Therefore, after you pass away, your life insurance company will send the proceeds from your policy to the beneficiary designated in the company’s records.

Consider the following undesirable scenario:

Bob and Susan married and had a child.  While married, Bob purchased a million dollar life insurance policy and designated Susan as the beneficiary.  Bob’s Will also designated Susan as the beneficiary.  After Bob and Susan divorced, Bob’s attorney drew up a new Will, removing Susan as the beneficiary and directing that Bob’s entire estate pass into a Trust set up for the child.  Bob did not know that he needed to change the life insurance policy beneficiary designation from Susan to the Trust set up for the child.  After Bob died, Susan inherited a million dollars from Bob’s life insurance policy, and the Trust set up for the child got nothing!

When preparing a comprehensive estate plan, a skilled estate attorney will make sure that your non-probate assets’ beneficiary designations are coordinated with the terms of your Will in order to prevent the undesirable results shown in the scenario above.

Smart estate planning lets you determine the distribution of the assets in your entire estate to protect your loved ones in the most efficient manner.  If you are interested in creating or updating your estate plan, we at The Becker Law Firm would be happy to help you.

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