Here’s the scenario: Fran’s husband, Ed, passed away recently. Then she learns that his life insurance proceeds are going to his first wife, Sally. She calls her lawyer, frantically, believing that this cannot be true. Fran was the beneficiary of his estate.

Turns out that Ed had failed to update the beneficiary assignment on his life insurance policy. By law, Sally is entitled to the money. The beneficiary assignment trumps the will.

Lesson: periodically reviewing your beneficiary assignments is a key concept of estate planning.

According to a story on wmur.com, assets whose beneficiary assignments trump wills or other estate directives include:

  • life insurance policies
  • IRAs
  • retirement plans
  • employment contracts
  • employee stock options

So even making a last minute adjustment to your will cannot trump beneficiary assignments on these matters. Make sure you review yours regularly.

If you have questions about estate planning, feel free to call us for a consultation at (626) 696-3145.

Comments are closed.