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The importance of beneficiary designations in an estate plan

There are several ways that property can be passed to heirs as part of an estate plan. One way is by joint ownership, which is common with spouses or elderly parents and a child. Other assets may be passed according to instructions in a will. If there is no will, then Florida state law will be followed in determining what happens to assets.

Some assets, such as life insurance and retirement accounts, pass by beneficiary designation. It is important to ensure that these remain up-to-date. People may forget to update these even when reviewing the rest of the estate plan, and this can mean that assets pass to individuals despite an estranged relationship. It is also important that it is possible to locate the beneficiary designation and that a person’s intentions are made clear.

An example of the problems that can arise is a case that occurred in Pennsylvania in the case of a man who died in 2019. The man’s brother claims that he found a beneficiary designation form for the man’s Morgan Stanley account leaving the account to him. However, according to Morgan Stanley, there is no beneficiary designation on file. Without a beneficiary named, the asset is supposed to pass to his children, but his brother says his intention was to disinherit them. He has hired a handwriting expert.

An attorney might be able to assist a person in creating an estate plan that makes the person’s intentions clear. For example, wills can specify whether a family member is supposed to be disinherited rather than simply not leaving anything to the person, which could lead to arguments that the omission was simply an oversight. Communicating with family members about the estate plan and leaving copies of estate planning documents with an attorney may also reduce the likelihood of conflict.



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