Most people do not realize that a legal Will still has limitations. If left unaddressed, those limitations can cause significant problems in the future. A Will governs ONLY those assets which do not have a beneficiary or a joint owner on them. For example, most life insurance policies, IRAs, 401(k)s, etc., include a designated beneficiary. The company that holds that asset is REQUIRED BY LAW to pay the funds to the beneficiary, even if that is completely contrary to the provisions of the owner's Will or Trust. The funds must even by paid to an EX-SPOUSE, despite a judgment of divorce, if that person is still listed as the beneficiary.

How Can I Protect My Loved Ones?

It is crucial to review beneficiary designations often, especially after a marriage or a divorce. A Will or a Trust cannot change who is designated as a beneficiary on an asset. Instead, the owner must complete a change of beneficiary form for a particular asset, and submit it to the company that holds that asset. It is also helpful to keep a written "inventory" of your assets, including a list of the named beneficiary on each asset, and make sure it complements, rather than conflicts with, your Will or Trust.

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