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Understand how beneficiary designations can affect your estate plans

Protecting your assets for your heirs may be a top priority for you, especially when you’ve worked hard to build those assets up. Many people focus on their will as the main vehicle to pass assets to their heirs or they establish trusts to preserve those assets. 

Some assets, including many financial accounts, aren’t handled through the will or trusts. Instead, they are handed down when you pass away via a payable on death (POD) designation. You fill this document out when you establish the account and can change it when you need to. 

Don’t double designate any assets

One thing that many people don’t realize is that they shouldn’t double designate these assets. This means that you shouldn’t ever put an asset that has a payable on death designation into your will, nor should you designate it for a trust. The asset must follow the payable on death designation, so that’s all you need for your loved one to get it when you pass away. In fact, you should make certain that you have the correct designation on all such assets because they will pay out as dictated, not according to anything in your will.

Some of the assets that have this kind of POD designation include bank, savings, and retirement accounts. Life insurance policies also have beneficiary designations, but these might be placed in a life insurance trust to handle the disbursement. 

An attorney who is familiar with these matters can help you to preserve your assets so you’re able to ensure your loved ones get what they’re supposed to. You can discuss your goals with the lawyer and work with them to set things up in a way that makes your goals a reality.