Are Your Beneficiary Designations Updated for Your Utah Estate?

Finally your will is finished, and you can sleep soundly knowing that your heirs will receive the assets that you intend. Right? Not necessarily.

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 have a say in all matters? Not exactly. Be sure to keep track of all of your accounts and your beneficiary designation forms — or else your estate might swiftly break apart and 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 little legally-binding contract that allow you to simply list who should receive the account if you’re not around to do so. The trouble is that this “contractual aspect” also allows beneficiary designations because of this contractual relationship to pass assets outside probate of a will or in contradiction to any beneficiary designation in a trust. In fact, naming someone as beneficiary on the account-provided form can even undo anything you say in the will about who should receive what. So, say you name a spouse as a beneficiary to your IRA, and then you divorce but fail to change the designation. That spouse will still get the IRA even if you intend for everything to go to the kids, a new spouse, your sibling or any other party. Your Ex is named on that legally-binding designation, so it’s theirs.

Keeping these kinds of beneficiary forms all together and updated is often among the more important aspect of your estate planning, but not necessarily the only important element. Proper planning is about mindfulness with regard to all of these little asset details and proper organization of them.

Reference: Yahoo News (May 23, 2014) “How Your Ex-Spouse Could Inherit Most of Your Money”