Many people incorrectly assume that all their assets will be distributed through their will / living trust. Unfortunately, this is a big misconception. Applicable assets are passed on strictly in accordance with the Beneficiary Designations on file with the custodian and without regard to provisions in your estate planning documents.
These are the assets where beneficiary designations supersede the provisions in a Will / Living Trust
- Life insurance policies
- Annuities
- Retirement accounts such as 401(k)s and IRAs
- Bank accounts with a payable on death provision
- Investment accounts with a transfer on death provision
After the following life changes, you need to double check your beneficiary designation forms:
- Marriage
- Divorce
- Births
- Deaths
- Job changes, including retirement
- Long-term care needs of one spouse
- Disability of a child or grandchild
Your Beneficiary Designations are a critical part of your overall estate planning. They should be reviewed with your estate planner regularly.
Note: RVW does not provide tax or estate planning advice.