It’s not easy to create an estate plan because it is hard to think about your own morbidity, but it can also be challenging to think about your unique family dynamics. When naming people, such as executors or trustees in your estate plan, you also need to be sure that they’re capable of effectively carrying out these tasks and communicating with beneficiaries.
Beneficiaries require careful consideration. These beneficiaries need to be updated on specific forms with the company directly, such as with the manager of your 401(k) account and on your life insurance policies.
Unfortunately, mistakes made with beneficiary conflicts can and do occur, meaning that your assets don’t transfer as intended. One of the most common examples is when someone forgets to update their life insurance beneficiary form after going through a divorce.
Since your previous spouse is more than likely named as the primary beneficiary on this account, legally, they’re entitled to inherit all of those assets and they are not obligated to pass them on to your children or other beneficiaries you would have chosen. It’s also important to name backup or contingent beneficiaries so that the assets don’t wind up transferred into probate, should the original beneficiary pass away.
Don’t forget any bank account that may have a payable-on -death designation that allows this account to transfer quickly to a beneficiary upon the death of the original owner. These should be considered as part of your bigger estate plan, but should also be discussed clearly with your knowledgeable estate planning attorney in Pasadena, CA