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From A Texas Estate Planning Attorney: Estate Planning is More Than a Last Will and Testament!
Did you know your beneficiary designations on retirement accounts may be MORE important than your Last Will and Testament? Here’s why…
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Your beneficiary designations “trump” your last will and testament. In other words, let’s say you have an IRA, 401k, bank account and/or life insurance policy. Let’s say you have three children. Let’s also say that your Will gives all of your assets to your three children. Lastly, let’s say your beneficiary designations name your daughter as the beneficiary.
In this case, who gets the accounts? Your three children equally? Or, just your daughter? The answer surprises many people!
The answer is, your one daughter inherits the accounts. It doesn’t matter that your Will states that all three children should inherit equally. The beneficiary designations on file with the financial institutions “trump” your will, so that one daughter gets everything.
We have some estate planning clients that will tell us, “I know that one daughter will get control of the accounts if I name her as the beneficiary on the accounts, but I trust that she’ll ‘do the right thing’ and distribute it equally among the three children.” So, is that a good estate plan? Should you trust the daughter?
I hate to sound cynical, but the answer is ‘no’. She may decide not to share the proceeds. In other words, she may choose not to do the ‘right thing’. She may consult with a CPA or probate attorney who advises her that she really shouldn’t split up the money if she’s listed as the sole beneficiary.
If your intention is to have the accounts divided evenly among your children, then you should state that in your beneficiary designations with the insurance companies and financial institutions. There is no benefit to listing just one of the children as the beneficiary, if it’s not your wish that that one child get all of those accounts.
Long story short: Estate Planning is more than a Will! Any good estate planning attorney will tell you that your Last Will and Testament should work in concert with your beneficiary designations.
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Free Consultation
To ask a legal question or get legal help from Texas wills and Texas estate planning attorney Isaac Shutt, use the online contact form to the right or call (214) 302-8197. If you prefer to meet at the office in person, the attorneys will gladly offer a free consultation.
Visit www.ShuttLawFirm.com for more information on basic Texas estate planning documents or how to get a Texas Last Will and Testament, contact Richardson Texas Estate Planning Attorney Isaac Shutt at ishutt@shuttlawfirm.com.
Shutt Law Firm’s office is conveniently located just north of Dallas, Texas, and just South of Plano. The law office is near the intersection of highway 75 and Arapaho Road in Richardson, TX.
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You can also call the Estate Planning Attorneys at (214) 302-8197 for more information on the topic discussed in this article or to discuss a different legal matter.
Please consider the Shutt Law Firm if you want help with a Texas Last Will and Testament, or you need Dallas Estate Planning Attorneys serving Richardson, Plano, Allen, McKinney, Garland, Addison, Rockwall, TX, Collin County, Dallas County, or surrounding North Texas area.
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DISCLAIMER: Nothing in this brief article constitutes legal advice. The information provided herein is merely provided in the spirit of education and is believed to be accurate as of the time it was originally prepared, and laws change. If you have a legal question, you should consult a lawyer for your specific legal situation. Further, nothing in this article shall be construed to have started an attorney-client relationship. No such relationship exists until both you and and an attorney at Shutt Law Firm sign an engagement letter.
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