Estate Planning: Beneficiary Designations

Effective estate planning is more than creating a will. As part of the process, it is essential to examine beneficiary designations on accounts such as life insurance policies and retirement accounts. Generally, these beneficiary designations will override any provisions in a will or a trust.

For example, John married Jane twenty years ago when John first started working at BigCorp where he opted into a generous employer sponsored retirement plan. Jane was named as the sole beneficiary of John’s retirement. After fifteen years, John and Jane divorced. John later married Joanna and created a will that named Joanna as the sole beneficiary of all of his assets. However, John forgot to update his retirement plan’s beneficiary designation. Upon John’s death, the retirement account’s beneficiary designation overrode his will and the proceeds were distributed to Jane and not John’s intended beneficiary, his second wife Joanna. Unless Joanna can convince Jane to send her the proceeds, Jane is going to have to go to court and pursue potentially costly litigation to fight this distribution.

A simple change of beneficiary form was all that was needed to avoid this situation. When creating an estate plan, these types of issues need to be examined. To discuss an estate plan to ensure that your assets go to who you intend, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100).

This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney