Are beneficiary designations and probate property incompatible? With the help of an estate-planning attorney, they don’t have to be.
Granted, contractual beneficiary designations usually bypass the probate process. As such, provisions in a will cannot be used to assign or change beneficiary designations. Such non-probate assets might include life insurance accounts, pensions, IRAs, and/or 401(k) accounts.
However, an individual should still discuss non-probate assets with an estate-planning attorney. An attorney that focuses on wills, trusts and other estate-planning strategies knows that state law might impact certain beneficiary designations. For example, a divorce might affect the validity of a beneficiary designation.
An attorney can offer other insights, as well. For example, assets with a beneficiary designation may carry additional options or restrictions. Tax-deferred retirement accounts like IRAs may have required minimum distributions.
Our law firm focuses on estate planning, and we can help individuals plan not only for asset transfers, but also for ways to help beneficiaries through the process of claiming their inheritance. For example, a beneficiary might be able to elect the timing and amount of benefits, such as a lump sum payment instead of installments. An attorney can even include instructions with estate documents, such as a simple explanation that a death certificate is required to transfer a certain financial account to the named beneficiary. Other non-probate assets, like insurance, may require an additional claim form to be presented with the death certificate.
Source: Forbes, “Your Will And Trusts Aren’t Enough: Using Beneficiary Designations As An Estate Plan,” Jamie Hopkins, June 2, 2015