Estate Planning – Assigning Beneficiaries to assets

by Bob Frie

Almost every client thinks if they make a Will and devise assets to a particular beneficiary the Will disposes of all assets. However, that is not true of every type of asset.

Assets that have their own separate beneficiary designation or are owned in Joint Tenancy will not be controlled by the Will but will pass to the surviving owner, Joint Tenant, or designated beneficiary.

For example, Dad has an old 401k account which designates his kids as beneficiaries. He is now estranged from his daughter because she has a drug addiction. Even if Dad intentionally leaves his daughter out of his will as a beneficiary but forgets to remove her as beneficiary on his 401k, her share of the 401k account will automatically pass to her upon his death.

It is important to remember that beneficiary designations specified on assets trump Wills. This is true for assets such as bank accounts, life insurance policies, annuities, investments, 401k’s, IRA’s, and other types of retirement accounts. When making your Will be sure to check and change if necessary the beneficiaries on your assets.