Making sure who gets what in your will is a critical part of an estate plan. If it’s not done right, assets can be diverted from those intended to receive them, increasing the likelihood of litigation. The National Law Review takes a look at why it’s important to designate precisely which beneficiaries should receive specific assets in an estate plan.
Beneficiary designations override the terms of your Will or Trust with respect to that asset. For example, if a friend is designated as the beneficiary on your life insurance because the form was completed before you had kids, that policy will be paid to the friend upon death even if all of your other estate plan documents direct your assets to your children. Or, alternatively, if no beneficiary is listed we may end up having to open a court process to administer the assets.
It’s important to periodically review the recipients in an estate plan. Click here to read more about the items you should consider.