Estate Planning: Beneficiary Designations

If you have life insurance, a 401(k), or a bank account, you have almost certainly already completed beneficiary designations. If something happens to you those designations will control how the account or other asset is distributed upon your death even if you have an estate plan in place. For this reason, coordinating your beneficiary designations with your estate plan is just as important as signing your will.

Assets transfer at your death in four general ways:

1. Joint ownership - assets that are owned jointly with another person with right of survivorship will automatically pass to the surviving owner upon your death.
2. Beneficiary designations - assets that have a pay-on-death beneficiary will automatically pass to the person named as beneficiary upon your death.
3. Trusts - if you have established a trust and funded the trust, the assets in the trust will pass according to the terms of your trust upon your death.
4. Probate - a will basically controls the disposition of your assets if there is no joint owner, no named beneficiary, and the asset is in a trust. Like a trust, the assets subject to your will pass according to the terms of your will upon your death. If you have no will, the same assets then pass according to the laws of intestacy as set forth in Minnesota state law.

If your trust or will distributes your assets in a different way than the beneficiary designation would, it is time to update your beneficiary designation to reflect your wishes. Contact Wagner Oehler, Ltd. if you would like help reviewing your beneficiary designations.