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Your Assets Will Be Given To The Listed Beneficiary EVEN If Your Will States Otherwise

Your Assets Will Be Given To The Listed Beneficiary EVEN If Your Will States Otherwise

May 04, 2023

Did You Know That Your Assets Will Be Given To The Listed Beneficiary EVEN If Your Will States Otherwise?

(𝗲𝘅-𝘀𝗽𝗼𝘂𝘀𝗲?)

5 Important Facts About Beneficiary Designations in Estate Planning

When it comes to estate planning, many individuals are unaware of a crucial aspect that can significantly impact the distribution of their assets. Contrary to popular belief, your will does not have control over all of your assets. In fact, there are certain assets that will be given to the listed beneficiary, regardless of what your will states. As a financial advisor specializing in estate planning, I want to shed light on this important topic and provide you with valuable insights to ensure your estate plan aligns with your wishes. Here are five essential facts about beneficiary designations:

1. Certain Assets Are Not Governed by Your Will

It is vital to understand that specific assets do not pass through probate and are not governed by your will. These assets include life insurance policies, retirement accounts, and payable-on-death bank accounts. When you establish these types of accounts, you are required to designate a beneficiary who will receive the funds upon your death. The beneficiary designation is a legally binding contract, and the funds will be distributed according to the named beneficiary, regardless of what your will specifies.

2. Beneficiary Designations Override Will Provisions

The designation of beneficiaries on certain accounts takes precedence over any instructions outlined in your will. This means that even if your will states otherwise, the assets tied to these accounts will be distributed to the named beneficiary. Therefore, it is crucial to regularly review and update your beneficiary designations to ensure they align with your current wishes.

3. Regularly Review Beneficiary Designations

To ensure your beneficiary designations accurately reflect your intentions, it is essential to review them regularly, especially during major life changes. Significant life events such as marriage, divorce, the birth of a child, or the passing of a loved one may warrant a reevaluation of your beneficiary designations. By proactively reviewing and updating your designations, you can prevent unintended consequences and ensure your assets are distributed according to your wishes.

4. Proper Procedures for Changing Beneficiaries

If you decide to change the beneficiary on an account, it is crucial to follow the proper procedures. Typically, this involves filling out specific forms, providing proof of identity, and submitting the request to the respective financial institution or insurance company. By adhering to the proper procedures, you can ensure that your desired beneficiary is accurately reflected on the account.

5. Seek Professional Guidance

Given the complexity of estate planning and beneficiary designations, it is highly recommended to seek professional guidance. A qualified financial advisor or estate planning attorney can provide invaluable expertise, helping you navigate the intricacies of beneficiary designations and ensuring your estate plan aligns with your overall financial goals.

In conclusion, it is essential to recognize that your will does not govern all of your assets. Beneficiary designations on certain accounts hold significant weight and can override any instructions outlined in your will. By understanding the impact of beneficiary designations and regularly reviewing them, you can ensure that your assets are distributed according to your wishes. Seek professional guidance to ensure your estate plan is comprehensive and aligned with your financial goals. Remember, proper estate planning is a crucial step in securing your financial future and protecting your loved ones.


About the Author:

Damon Paull is a Marine Corps veteran who has traveled to over 20 countries. As a financial advisor in Houston, Texas, he is passionate about helping business owners and individuals pursue their financial goals. You can connect with Damon and his team at: 703.362.5747 or DPaull@totuswm.com.