In my role as client advisor, I educate estate planning clients about the importance of current and accurate beneficiary designations. Beneficiary designations are forms issued by financial institutions on assets such as life insurance policies, Individual Retirement Accounts (“IRAs”) and 401Ks which indicate specific individuals as beneficiaries of those assets. These financial products are called non-probate assets, and the beneficiary forms determine who gets these assets upon the death of the account holder.
Many of my clients are unaware that these non-probate assets typically pass outside the client’s will and estate upon their death. Unless the stated beneficiary is the estate or a trust under a will, the beneficiary will, in most cases, be a named individual(s) such as a spouse or a child, and the assets in the account will pass by contract to that named beneficiary.
Our law firm makes sure that clients understand the importance of the beneficiary designations and we provide assistance with these documents. We also suggest that clients remember to update both their wills and their beneficiary designations as their intentions and life circumstances change.