It is important to update wills and trusts to ensure that they are still appropriate and relevant based on a person's circumstances and the laws. However, New York residents should not forget that beneficiary designations also need to be updated as people's lives and situations change.
Life insurance policies, pension plans and annuities have beneficiary designations. These designations name the individual that will be given assets from a policy or plan if the owner dies. It's important to note that beneficiary designations override what is in a will or a trust.
These types of assets do not go through the probateprocess. As a result, if someone has left a retirement account's assets or the proceeds of a life insurance policy to a person in a will but the beneficiary designation names another individual, the latter person will be given the assets. Whenever people update and review their wills and trusts or whenever someone's life changes significantly, they should also be sure to review their beneficiary designations to avoid potential issues. As an example, a person who has divorced will often want the former spouse removed as the beneficiary of a life insurance policy.
A comprehensive estate plan can include more than a will, and experienced attorneys will often sit down with their clients and describe the other types of documents that can be necessary and desirable and that can also be effective during a person's life. One example is a power of attorney that would give a trusted individual the right to make health care and financial decisions if the principal becomes incapacitated and thus unable to do so.