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Avoid a common estate planning mistake

| Dec 30, 2013 | Estate Administration |

One of the most common, yet potentially harmful mistakes Florida residents can make when estate planning is not keeping their beneficiary designations up to date. Because a beneficiary designation takes precedence over a will, it is important for Floridians to review them regularly to ensure they reflect the account holder’s intentions.

Many people have several accounts that list one or more beneficiaries, including IRAs, 529 college savings accounts, life insurance policies and bank accounts. They often require an account holder to list a beneficiary or fill out a payable upon death certificate when the account is opened. There are several instances that may necessitate changing the designations and doing so can ease the transfer of the assets upon the account holder’s death.

A divorce, remarriage or birth of a grandchild are great times to review the person listed as a beneficiary on retirement, life insurance, bank or investment accounts. The designation will also need to be changed if the person listed dies, becomes disabled or the account holder no longer wants them to inherit the asset. Accounts should be reviewed for accuracy to ensure all account information was transferred in the event that an institution that manages the account changes ownership.

An attorney with experience in estate planning may review all aspects of a client’s portfolio to ensure that assets will go to the intended person or charity. An attorney may also explain the benefits of a trust if their clients wish to leave assets to a minor or a loved one who is disabled. By keeping beneficiary designations up to date, assets may transfer directly to the intended person without being subject to probate.

Source: Forbes, “The Big Estate-Planning Goof You May Be Making“, Harper Willis, December 16, 2013

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