Finally your will is finished, and you can sleep soundly knowing that your heirs will receive the assets that you intend. Right? Not necessarily.
By Stephen K Lehnardt
If you've got a will, you may feel like you are all set when it comes to your estate plans. But does your will control everything? Not exactly. In addition to your will, make sure you keep track of all of your accounts and your beneficiary designation forms—or else your estate might swiftly break apart and pass into the wrong hands.
This is one of those topics we have to repeat every so often so that each beneficiary designation you sign (or don’t) will stick with you as the important document that it is. A new echo came in the voice of Yahoo News in a recent article titled “How Your Ex-Spouse Could Inherit Most of Your Money.”
Beneficiary designations are convenient, legally-binding documents that allow you to simply list who should receive the account if you’re not around to do so. The trouble is that this “legally-binding aspect” also allows beneficiary designations to run parallel to the will, and often over and above it. In fact, naming someone as beneficiary on the account-provided form can even undo what you say in the will about who should receive what.
One scenario that plays out too often is naming a spouse as a beneficiary to the IRA, and then the couple divorces but fail to change the beneficiary designations. That spouse will still get the IRA even if it is intended to go to the kids, a new spouse, sibling or any other party. The “Ex” is named on that legally-binding designation, so it’s theirs.
Keeping beneficiary forms all together and updated is often among the more important aspects of your estate planning, but not necessarily the only important element. Even the best planning is quickly undone if we are not mindful with regard to all the little asset details and proper organization of them.
For more information in Liberty, MO and the Kansas City Area about effective estate planning and to access free information and tools to organize your estate, visit our elder law and estate planning website.
Reference: Yahoo News (May 23, 2014) “How Your Ex-Spouse Could Inherit Most of Your Money”