One of the most common misconceptions about estate planning is that simply having a Will or Trust automatically controls how all of your assets pass when you die. The reality is that assets passing to one or more named beneficiaries pass completely independently of your Will. That means that life insurance, annuities, retirement accounts, bank accounts with POD (payable on death) beneficiaries, and investments with TOD (transfer on death) beneficiaries pass to whomever is named – no matter what your Will says. The account holders are contractually bound to honor your written beneficiary designations.
A recent MarketWatch article explored three horror stories where people’s assets didn’t pass the way they intended, all because the account owners had not updated their beneficiary designations to reflect their current wishes.
Check out the full article for more details about each of these unfortunate cases.
As life events occur, including a birth, death, marriage, or divorce, it’s important to update your Will or Trust and your beneficiary designations. To learn more and for help creating a plan that incorporate all of your assets and reflects your wishes, contact us today!