Beware the Beneficiary Form

HNW Elder Law, Estate Administration and Probate, Estate Planning, Will Contest and Probate Litigation

Part 4 of 4

This is the fourth and final installment on the use of beneficiary designation in probate and estate planning.

For non-retirement assets, your assets and savings typically flow into your estate upon death and are distributed according to your will or trust, assuming you have one.

For retirement assets, it’s not simple.  The funds would be distributed according to your administrator’s plan document, for example:  to your spouse if you are married, or to your estate if you are not.  This can happen inadvertently if you don’t update beneficiary forms when beneficiaries die, or if you don’t name contingent beneficiaries.  (A contingent or second beneficiary is the person or entity you want to get the proceeds of your accounts if the primary beneficiary predeceases you. There can be multiple contingent beneficiaries).

I recently read of a person, a widow, who died suddenly last year.  If the widow’s beneficiary designations had not been updated after her husband passed away, her $1 million IRA would have gone to her estate instead of directly to her children, triggering a big tax bill and preventing her children from stretching out the IRA distributions for decades.

How can I ensure my wishes will be honored?

Financial institutions merge.  Records can be lost.  Keep copies of all your beneficiary forms and send them certified mail, return receipt requested.  Then check regularly, perhaps at tax time, to make sure that what your institution has on file is correct.  Don’t expect your bank, broker or IRA custodian to tell you if something is amiss with your beneficiary designations.  Don’t assume it’s right.

For more information, please contact Fredrick P. Niemann, Esq. toll-free at (888) 800-7442 or email him at

By: Fredrick P. Niemann, Esq. a NJ Estate Planning Attorney

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