It is important to harmonize your estate plans. Part of the process is making sure your will works with the rest of your estate planning to realize your desires for your family. Sometimes a will is not the proper way for your heirs to inherit from you.
An important act of estate planning is designating beneficiaries. Some of your assets probably allow for this. However, you cannot use your will to change a beneficiary designation you have already made.
The problems with using a will
Through a will, you can legally make sure that your heirs will take ownership of your property after you die. However, Kiplinger explains that this is not the case for everything you own. Some assets have a mechanism in place to assign ownership to another person without the need to go through the state succession process.
A beneficiary designation allows you to name someone to receive an asset after your death. However, if you change your mind and reassign a beneficiary in your will, a court is very likely to disregard what the will says and retain the earlier designation.
Examples of beneficiary-designated assets
There are quite a few assets and accounts that allow you to create a beneficiary designation. They include the following:
- 401(k)s
- IRAs
- Retirement accounts
- Insurance policies
- Trusts
Keep in mind that other mechanisms exist to pass on accounts apart from using a will. A joint tenancy with a right of survivorship provision could provide full ownership to another person after your death. Consider whatever options are available for each of your assets.
