The Importance of Beneficiary Designations to Your Estate Plan

CAUTION! Your Beneficiary Designations on Bank Accounts, Life Insurance and Other Assets May Defeat the Goals of Your Last Will

Do you own assets held in joint accounts, or where you have a named beneficiary?

If you have answered the above question, “yes” these assets will not be distributed in accordance with your Last Will. Instead, all joint assets will pass to the surviving joint owner, and all assets with a beneficiary designation will pass to that beneficiary.

If you have any joint accounts with one of your children, the assets in that account will pass to that one child at your death, regardless of what your Will might say, unless the account was set up as a convenience account whereupon it will be distributed according to your Last Will. You should carefully review the ownership and beneficiary designation(s) of all of your assets to be sure that the assets will be distributed to the right people at your death.

Are your residuary beneficiaries correct? Residuary beneficiaries are the people who receive the balance of your estate after (i) all the debts, expenses and taxes have been paid, (ii) any specific bequests have been made, and (iii) joint accounts or any assets with beneficiary designations have been distributed to the appropriate people. You should review these sections of your estate planning documents, especially your Last Will carefully. If one of the beneficiaries were to predecease you, will that beneficiary’s share pass to his or her children (your grandchildren), your other children, or otherwise? This is a very important point to discuss with your attorney.

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The use of a properly written New Jersey will is a very good estate planning tool, but your beneficiary designations to you your assets must complement and not conflict with your estate planning objectives.

Not sure if your will, trust or beneficiary designations are correct? If you have any questions concerning this subject, contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291, or fniemann@hnlawfirm.com. He is happy to answer your inquiries.

 

 

 

Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Last Wills Attorney