Crucial Beneficiary Designations


Beneficiary designations are an increasingly important element of estate planning. They can help to avoid probate, but they can also stir up disputes if not part of a coordinated estate plan. It is not enough to specify heirs in a will or trust. Beneficiary designations in life insurance policies, 401ks, IRAs, and buy-sell agreements frequently trump anything stated in a will.

The following beneficiary designation reminder was published in the Digital Journal:

Most people think of wills and trusts when they hear the words estate planning. However, an essential — and often overlooked — aspect of estate planning is making beneficiary designations and keeping them up to date after life changes. As more and more people put significant amounts of money into retirement accounts such as 401(k)s and individual retirement accounts (IRAs), making sure that the assets in those accounts are distributed to the right people is even more important.

According to the Wall Street Journal, 401(k)s and IRAs account for about 60 percent of the assets of U.S. households investing at least $100,000. Both state and federal laws affect to whom these assets may go, and the results can be complicated, especially when the owner of the account has been divorced and remarried. Therefore, the assistance of an experienced estate planning attorney is invaluable to help people make the correct beneficiary designations.

The rest of the article is available from Digital Journal.

The key word is harmonize beneficiary designations with the rest of the estate plan.

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