There is a critical part of estate planning that is not part of the essential legal readiness documents such as Wills, Trusts, and Powers of Attorney. Having accurate and up to date beneficiary designations on certain financial accounts, life insurance policies, and life insurance policies can avoid unintended consequences when someone dies. Many people don’t realize that assets that pass according to a beneficiary designation are not included as part of a Last Will and Testament or Revocable Living Trust which can have a major impact on the success of an estate plan. For example, if a Will or a Trust has provisions that delay distributions to beneficiaries until some age milestone, those provisions don’t apply to money that comes from life insurance benefits or retirement accounts that names the beneficiary directly.
Life insurance policies commonly have a beneficiary designation of a spouse, children, grandchildren, or a Trust if the intent is to tie in the life insurance funds with the provisions of a Trust plan. Similarly, retirement accounts pass according to the beneficiary designation made by the account owner. Generally this is to a named individual such as a spouse or children, but again, if the intent is to tie in these assets with the goals of the estate plan a Trust can be named as the beneficiary on behalf of the individual beneficiaries.
Benefits of Consulting with an Experienced Estate Planning Attorney
There are many reasons as to why it is smart to consult with a knowledgeable and experienced estate-planning attorney. As previously mentioned, it is imperative that the overall estate plan is coordinated with beneficiary designations so as not to result in the deceased having unintended beneficiaries. Estate planning attorneys are able to accurately review beneficiary designations to ensure that this is the case. We often describe the goal of what we do in our planning process is to, when appropriate, bring together the estate plan with the financial plan which otherwise can be seen as being on parallel tracks that only come together if you intentionally build the connection that makes that happen.
Reilly Law PLC Can Help You with Your Estate Planning Needs
We can work with you to assess whether or not you would benefit from building that connection between your estate planning goals and your assets that pass by beneficiary designations. At Reilly Law PLC, we can help walk you through the various issues surrounding beneficiary designation and estate planning in order to ensure that your wishes can be successfully met. To learn more about beneficiary designations and estate plans or to schedule a free consultation, visit us online or call us at 703-579-1936 today!