Keeping Beneficiary Designations Current in an Estate Plan

When people in Georgia prepare an estate plan, they may have some assets that are passed by beneficiary designation or another method does not involve a will or the probate process. Retirement accounts, life insurance policies and trusts all pass by beneficiary designation. Other types of property, such as a home or a bank account, might be held by two individuals. This could mean that each person has joint ownership with rights of survivorship, meaning that the asset passes to the surviving person when the other person dies.

Property passed in this way instead of going through probate may be less vulnerable to challenges because next-of-kin do not get notified. However, this is not always true. For example, there is a case in Pennsylvania in which a man has claimed he found a beneficiary designation form for his brother’s Morgan Stanley account in his brother’s house. Since there was no form on file at Morgan Stanley, the asset is supposed to pass to the man’s children, but the man’s brother said he intended to disinherit his ex-wife and children.

It is important to include beneficiary designations in the estate planning process. People may forget to change these designations if a relationship breaks down, and this could result in assets passing in an unintended way.

Working with an attorney and preparing a will might reduce the likelihood of this happening. For example, if a person wishes to disinherit a child, the will can specifically state that instead of simply leaving the child out. A will, trust, beneficiary designations and other estate planning documents should also be reviewed periodically to ensure that they remain current. Deaths, births, divorces and marriages could all change who the person chooses as beneficiaries or for certain roles in the estate, such as executor.

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