When most people think of estate planning, they typically think about a Will, a Trust, or a Power of Attorney (and hopefully a Medical Power of Attorney as well!). What they may not think about are the beneficiaries of their life insurance policies. Reviewing and updating designations of beneficiaries is the most overlooked part of preparing or updating an estate plan.
Typical assets that have beneficiary designations include life insurance policies and tax-deferred accounts/qualified plans such as IRAs and 401ks. Bank accounts and brokerage accounts can also have transfer on death or payable on death designations. The most important thing to know about these assets is that they are non-probate assets, meaning that they do not pass to your beneficiaries pursuant to the terms of your Will. As private contracts, these assets instead pass to the beneficiaries pursuant to a beneficiary designation.
Because assets that pass by beneficiary designation can constitute a large portion of an estate it is important that you review and update, if necessary, your designations on a regular basis to ensure that they fit within your plan.
Written By Brian Boys
Originally from Illinois, Brian and his wife, Elisabeth, a Virginia Beach native, moved to Hampton Roads after Brian’s graduation from the T.C. Williams School of Law at the University of Richmond.
