Many people in New Jersey are under the impression that when they change their will, their assets will go to whoever is designated in the will. However, there are many assets that aren’t governed by the will. If the beneficiaries of those assets aren’t changed as well, the distribution of assets upon death will not be governed by the will, but by the beneficiary designation.
Things such as life insurance policies and retirement accounts often aren’t governed don’t have to go through probate. This is often good news to those trying to avoid having to put their assets through probate, but can be bad news if they are not periodically reviewed. Most people will change their wills after a major life change such as a divorce.
Beneficiary designations also need to be changed after major life events. If not, there can be a disconnect between a person’s wishes at outlined in his or her will and the beneficiaries designated. There is a belief that the will is the controlling document upon death, but any beneficiary designations are not controlled by the will.
It’s easy to see where this could cause problems for New Jersey families when it comes to the distribution of assets after death. The ex-spouse or now estranged friend or relative could still end up inheriting assets that the maker of the will did not intend for them to receive at some point after the original designations were made. For these reasons, it’s important for beneficiary designations to be reviewed when reviewing other estate planning documents.
Source: journaltimes.com, To Your Wealth: When a will doesn’t matter, Justus Morgan, Sept. 5, 2013
