Many times a person will fail to address beneficiary information on certain asset accounts, even when they are completing their estate planning documents in New York State.  Sometimes named beneficiaries turn out to be deceased individuals, or ex-spouses that were part of an individual’s life when they originally signed financial account documents that were never updated before the account owner’s death.  This oversight could have expensive and detrimental financial impacts to those who have been named in a will upon the death of an individual.  For example, if an ex-spouse is a named beneficiary on an account, and an individual leaves their assets to their children, the ex-spouse will be entitled to the assets because beneficiary statements supersede estate plan documents.

Update beneficiary forms often.

People are often confused, and believe that their will carries more weight than an old beneficiary document, often leaving them to forego checking and updating that paperwork. A review of beneficiary forms should be undertaken after the marriage or divorce of the account holder and any time there is a family birth or death, especially when a beneficiary dies. Financial advisers find that account holders who do not make necessary updates after a sole beneficiary’s unexpected death cause beneficiary problems, leaving assets to be passed to an estate, or forced into probate in some circumstances.  Individuals will sometimes name multiple primary, or contingent beneficiaries in the event one outlives the other, designating a percentage of funds to each, or leaving funds to trusts and charities.

Changes in financial institution.

If a financial institution has gone through a merger, documents can become lost or destroyed, and there may be changes to a new database system that fails to carry over a named beneficiary. Account holders should always request and keep copies of beneficiary forms with their important financial documents, or provide a copy to an attorney handling estate planning for that individual.

Complex beneficiaries.

An experienced estate planning attorney can advise an individual regarding named beneficiaries so there is less commotion upon their death.  For example, naming a minor child, or someone who would be fiscally irresponsible could be an error, or naming someone who is already wealthy may not be a prudent decision because an additional asset would push them into an even higher tax bracket.

Seek legal counsel.

The process of naming viable beneficiaries without causing negative consequence may seem burdensome, but a solid estate plan can be accomplished with the assistance of seasoned legal counsel who understand the state and federal laws that will impact the way a person’s will is administered. Contact Attorney Ron Meyers with questions regarding the importance of beneficiary documents for estate planning in New York.

 

Ron L. Meyers & Associates, PLLC

Address:  475 Park Avenue South, Suite 2100

Manhattan, NY 10016

Phone: 212-644-8787

 

Sources:

https://www.nysenate.gov/legislation/laws/EPT/7-2.3

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