When people think about estate planning, the first things that often come to mind are documents like wills, trusts, and powers of attorney. Those are all estate planning documents, but they are not the only estate planning documents out there. Estate planning attorneys can create many different types of estate planning documents to help their clients accomplish their estate planning goals.
Avoidance of probate is a common estate planning goal. People often want to move their assets into the hands of their beneficiaries as soon as possible after they pass away, privately, and with as little effort and expense as possible. Avoidance of probate is possible for many assets, and your estate planning attorney can help you create an estate plan that passes some of your assets outside of probate.
Some financial assets like retirement accounts, investments, and certain types of property can pass outside of probate via beneficiary designations. If you have assets in your estate plan that you can transfer using beneficiary designations, work with your estate planning attorney to complete those forms, and submit them to the proper parties. Once you have your beneficiary designations in place, review them, along with your entire estate plan, every few years to be sure that they still comply with your wishes. If you have a significant life change like a job change, loss of a spouse, divorce, or birth of a child, review your beneficiary designations, and make any changes that are needed.
Remembering to review and revise your beneficiary designations can make the difference between an estate plan that does what you intended for it to do and an estate plan that fails to carry out your wishes. For example, imagine that a married man is a participant in a pension plan, and he names his wife as beneficiary of the plan. The man and his wife divorce, and he forgets to change his beneficiary designation to make his children the beneficiaries. When the man dies, his ex-wife gets the pension. The beneficiary designation on a pension controls the disposition of pension funds, regardless of what is stated in a divorce decree or will.
Unfortunately, there are also plenty of other ways that a failure to change a beneficiary designation could have a result that is contrary to the asset owner’s wishes. For example, a young, unmarried woman opens an IRA account and names her parents as the beneficiaries. Several years later, she marries a man who has children from a prior relationship. She never changes the beneficiary designation on her IRA to indicate that her husband and stepchildren, not her parents, are the intended recipients of the funds in her IRA when she passes away. She dies, and her husband and stepchildren are left without the benefit of her IRA account because it belongs to her parents. If both of the women’s parents predeceased her, the IRA would pass to the first living person listed in the default sequence of inheritance as prescribed in terms of the IRA.
If you have any estate planning questions, call the law office of J. Joseph Weber, P.A. today, at 316-265-7802 to arrange a consultation. You can also reach us online. Our office in Wichita is open on weekdays, from 8 a.m. to 5 p.m.