Some New York individuals who are preparing for the distribution of their assets after they die may not realize that choosing their beneficiaries carefully can be as important as preparing a will. In fact, in some cases, the bulk of an individual’s assets may be transferred by beneficiary designations rather than via a will. Assets such as retirement accounts and life insurance policies are passed to heirs in this way.
Therefore, people should make sure that their beneficiary designations are integrated into their overall estate plan. It is also important to ensure that those designations are up to date. Divorces, deaths, marriages and births may lead to the need for a beneficiary change. Even after the owner has divorced, a former spouse who remains on the beneficiary form will most likely inherit the asset, even though that could likely have not been what the owner had wanted.
Another important consideration is blended families. For example, estate planning decisions can cause a good deal of conflict if a person has children from previous relationships. While estate planning experts report that good communication is usually one of the best ways to reduce this conflict, there are a few circumstances in which an individual may not wish to discuss beneficiary choices with family members. However, the owner’s attorney or another adviser should be made aware of how the beneficiary can claim the asset.
Even in the case of a fairly simple and straightforward estate plan, an attorney can help ensure that all documents are prepared correctly and may be able to suggest helpful alternatives. For example, a person with minor children may want to set up a trust for their benefit until they come of age. Other important decisions could include the preparation of a living will and a financial power of attorney.