Keeping Estate Planning Current

December 19, 2013 Posted In Estate Planning,Firm News

Wills are not the only estate planning documents used in Colorado that provide for a transfer of assets after the death of the owner. Many types of accounts include beneficiary designations that will govern the disposition of the property in those accounts, even where contrary provisions are made in the will. This would include bank accounts, insurance policies and retirement plans.

A change in family or financial circumstances often results in a corresponding change to a person’s wishes regarding the ultimate disposition of property. Estate planning concerns can be somewhat alleviated by making sure that these beneficiary designations are kept current and reflect those changes. One obvious change would be divorce or remarriage. Although some states have laws that eliminate former spouses as beneficiaries, not all do.

If a change of jobs has occurred and a retirement plan has been rolled over into a new plan, beneficiaries must be named for the new plan. Another scenario in which a beneficiary must be changed is if a primary beneficiary dies and there has been no secondary beneficiary name. The merging of financial institutions such as mutual funds, brokerages, or banks will sometimes cause older accounts beneficiaries to be discarded. Another reason to want a change would be the birth of a child or grandchild or the disability of a beneficiary.

Beneficiary designations that are outdated can often be at conflict with the wishes of the decedent and can harm an otherwise sound estate plan. They can also create unnecessary delays in the probate administration process itself. An estate planning attorney may be able to assist a client in conducting periodic reviews of these types of accounts.

Source: Forbes, “The big estate-planning goof you may be making“, Harper Willis, December 16, 2013

Contact Phillips & Blow, PC to make sure that your Estate Planning documents are up to date.

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