Beneficiary Designations Essential To Your Estate Plan
Your beneficiary designations may be even more important than your will or trust. That is because assets with a designated beneficiary transfer outside of your will or trust to the designated beneficiary. As a result, assets can end up going where you may not have intended. That is why it is important to make sure that your beneficiary designations line up with your overall estate plan.
For example, if you designate a beneficiary of the proceeds of your life insurance policy, the designated beneficiary will receive the proceeds even if it was your intent in your will or trust that the proceeds of those policies go to someone else. If you have a beneficiary listed on your checking or savings account, the accounts will pass to the designated beneficiary even if you intended them to be included as part of your estate and distributed as part of your will or trust.
It is important that your beneficiary designations on your assets, whether it be checking and savings accounts, life insurance, retirement accounts, or even your home, line up with your overall estate plan as set out in your will or your trust. It is also important when you are working with an estate planning attorney, that you let them know who the designated beneficiaries currently are and that you make any recommended changes to those designations so that your plan works as intended. The last thing you want is for an asset to go to someone that you did not intend to receive it.
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