BEWARE OF BENEFICIARY DESIGNATIONS!
Beneficiary designations are widely used in financial and estate planning.
These designations are commonly used to name the individuals or entities who are to receive the proceeds of life insurance policies, annuities or retirement plans after the death of the owner. Through the use of beneficiary designations, many assets can be transferred after death without any probate court involvement.
Many people are not aware that beneficiary designations trump a person’s will and trust. In other words, your designation forms will dictate who receives those designated assets, regardless of what your will or trust says.
Over the last few months, there has been an increasing number of incorrect, incomplete, and/or inadvertent beneficiary designations by my clients. If proper designations are not in place, then an estate could encounter unintended tax consequences or distribution problems.
Sometimes, people forget to update their designations when a beneficiary passes away. If a named beneficiary predeceases the owner, and a contingent beneficiary is not named, the asset will be included in the owner's probate estate. Or, a beneficiary may be able to be located, or a beneficiary may be a minor child.
Many problems and situations can arise with these beneficiary designations. They are not foolproof.
As part of the estate planning process, we will review all beneficiary designations on life insurance policies, annuities, and retirement plans to be sure they are consistent with the client’s overall estate plan, and recommend changes where appropriate.
Kevin L. Miller PC is happy to assist you if you have questions about the proper titling of your accounts and your beneficiary designations. Kevin Miller has been an estate planning, probate, and elder law attorney in Oklahoma City for more than 30 years. Kevin believes that everyone should have estate planning, regardless of age. If you have questions about estate planning, how long it takes, the cost of estate planning, or any extenuating circumstances required in your estate plan, please contact Kevin here, or call at 405-443-5100.