April 8, 2014
By Kenneth Lackey
A Last Will and Testament controls the disposition of a person's probate property, namely, that property that a person owns individually and for which s/he does not execute a beneficiary designation. “Non-probate property” typically passes outside of the Will. For example, jointly owned property usually passes to the surviving joint owner by operation of law. Life insurance and retirement accounts pass according to beneficiary designations for those accounts and policies.
Coordinating beneficiary designations is a critical component of estate planning. With the profound shift from defined benefit retirement plans to defined contribution plans -- in particular, 401k and 403b plans -- in many cases the majority of a person's assets will be in an account or plan that passes by way of beneficiary designation. This Wall Street Journal article discusses some of the nightmares that can happen when beneficiary designations are neglected.
The best Last Will and Testament money can buy will not accomplish someone's estate planning objectives if beneficiary designation forms are neglected. Please give us a call if you have a question about how beneficiary designation forms impact estate planning. If someone has passed away and you have questions about the impact of that person's beneficiary designation forms, please contact us.