An individual can spend one’s entire life building a legacy, assuming it will ultimately be given to the family and friends that he or she loves the most. Unfortunately, assumptions and failure to maintain the details of that legacy mean that it is at risk should the person die with the wrong beneficiary designations on important life insurance documents and investments. Protecting assets includes creating a will as well as keeping important documents up to date. A recent news article shares horror stories as well as strategies for avoiding a beneficiary mix-up that people in California may find interesting.
Some of the true tales include a pair of stepsons excluded from the inheritance of their father due to the fact that there was no named beneficiary after the death of his wife. The inheritance then fell to the next of kin; however, since the stepsons weren’t the man’s actual children, a court decided that the true next of kin were the siblings of the deceased man. In another case, two other children were denied pension benefits and life insurance after their father died. Even though the father and mother were divorced, and she had given up rights to pension and life insurance in the divorce agreement, the beneficiary designation was never changed, and therefore she got the money instead of the two children.
The moral of the story is this: keep the beneficiary designations up to date. Circumstances may change over the course of a lifetime, so be prepared to name a secondary beneficiary or to file the correct forms to change the primary. Individuals need to have legal agreements backed up with the proper forms for each individual account or policy.
Most people have an interest in protecting assets and will take all the help they can get. When it comes to estate planning, individuals in California may choose to enlist the assistance of an experienced attorney to help them sort out all the details. Being prepared in advance, and maintaining the details, will ensure that individuals will leave their legacy to the intended party.
Source: marketwatch.com, “Make this estate planning move right now: Check your beneficiary designations“, Bill Bischoff, June 29, 2017