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The JMK bLAWg

The Importance of Keeping Up-to-Date Beneficiary Designations in the Estate Planning Process

The Importance of Keeping Up-to-Date Beneficiary Designations in the Estate Planning Process

Payable on Death (POD) and Transfer on Death (TOD) beneficiary designations on bank, credit union, brokerage accounts, and real estate can be an effective means of dispensing of personal property outside of the costly and time-consuming probate process. Likewise for life insurance, IRA’s, retirement plans, and annuities which are not probate assets but pass according to the beneficiary designations.

However, it is vitally important that the beneficiary designations on these individual accounts match the overall intent of the estate plan in order to avoid issues of donative intent resulting in further delays and costs to your heirs. Achieving and maintaining consistency in highly sophisticated estate plans can be a complex and onerous process that should be undertaken only by competent legal professionals.

Wisconsin is a marital property state, so all married couples residing in this state who have not explicitly opted-out of the program automatically transfer a one-half interest of all of their property acquired during a marriage, with limited exceptions such as personal gifts and inheritances, to their spouse. This reality can often complicate beneficiary designations that name children but not a spouse, who may still have a claim to a portion of those benefits despite your intent at the time of designating the beneficiary. Additionally, designating minors as beneficiaries to any of the above-mentioned forms of property generally requires the establishment of a guardianship in order to complete the non-probate transfer.

John M. Kelly, Attorney at Law, LLC is home to 42 years of experience in the drafting, execution, and enforcement of comprehensive estate plans. With something as important as providing financially for your loved ones upon your passing, it is imperative that you seek the counsel of a seasoned professional. Whether you are a recent parent in need of an initial estate plan, or an elderly individual seeking to update a pre-existing plan, call today to discuss your options moving forward.