Why it is Important to Update Your Beneficiary Designations

March 10, 2020  

For many accounts in your estate, you can name a beneficiary who will receive those assets at your passing. Beneficiary designations are incredibly helpful because those assets bypass the probate system and pass on directly to the beneficiary named. However, once you name a beneficiary for an account, it is important that you update those designations in your estate plan on a regular basis. Failure to do so could mean that those assets in your estate get passed to someone that you did not intend. At Kryszak Law Firm, our team of legal professionals is experts in Ohio estate planning and probate law. Call or contact us today to schedule a free evaluation of your estate plan now.

Types of Beneficiary Accounts

Not all accounts have beneficiary designations. Some, like bank accounts, may have an option for a transfer or payable on death designee, but beneficiaries are typically listed for the following:

  • Annuity contracts
  • IRAs and other retirement accounts
  • Life insurance policies

You may also have a trust established that has beneficiaries listed for the property in the trust, as well. If the trust is a revocable trust, you can change the beneficiaries to that instrument as well before your passing.

Circumstances in Your Life May Change

As circumstances in your life change, who you wish to have listed as the beneficiaries on your accounts may change, as well. The most common example occurs when you or a close family member gets a divorce. If the spouse is listed as a beneficiary on any accounts, they will need to be removed. The same applies to any person who is listed as a beneficiary that passes away before you. If you leave their name on a beneficiary form, it can lead to a complicated inheritance amongst their heirs that you may not have intended.

Finally, if any other major life change occurs, it is important to review who is listed as a beneficiary on your accounts. Someone in your life may develop a drug dependency, receive a major career promotion, or have some other events occur where you believe that they no longer should be a beneficiary to your accounts. Whenever the circumstances in your life change, it is important to review the primary and secondary beneficiaries on all of the accounts in your estate.

The Court Sides With the Documents

Unlike many other issues that arise in estate planning, when it comes to beneficiary designations, the courts in Ohio have been fairly clear. Whoever is listed as a beneficiary at the time of your passing will receive the funds in that account, even if that person has not been a part of your life for a long time. It does not matter if family members testify to your intent for the estate; if someone is listed as a beneficiary, they are very likely to inherit that account. This is why it is important to review your designations on a regular basis with an experienced estate planning attorney.

Call or Contact Us Now

If you would like to learn more about beneficiary designations and estate planning, call or contact Kryszak Law Firm in Sheffield Village today to schedule a free consultation.