There are many different types of paperwork that people complete when planning their estate. Putting all of the paperwork together can be a time consuming and difficult process. Once a last will and testament and other estate planning documents are in place, people may set them aside with a sigh of relief and not give it another thought. If people do not update their Maryland paperwork upon changed circumstances, however, they results could end up being different than they originally expected.
Beneficiary designations are a key part of estate planning. Many different types of trusts and funds require that an individual designate who will receive the funds when they die. In this way, it is clear under the law who is intended to receive the funds for that particular account.
Accounts covered by these rules include IRAs, life insurance plans and retirement plans. Many people in Maryland and nationwide do not understand that the designation on the forms tied to the funds supersede all other designations. Merely writing a will after the designation form has been filed will not override what is on the designation forms for these accounts.
Estate planning requires occasional updates. Divorce is often a time to update beneficiary lists, as is the birth of a child. Remarriage is also a common time for people to sit down and revise their Maryland estate plans, including who they designate as heirs to various accounts. Regardless of when it is accomplished, it is good to be aware that these account designations do not update themselves automatically simply because a last will and testament was subsequently executed. Taking care of this paperwork may be an important part of any estate plan.
Source: thestate.com, "Keep beneficiary designations up to date," Ashleigh Brooker, March 10, 2013