Having a will is only the first part of securing one’s assets in the estate planning process. Although the will can secure a significant portion of one’s assets for intended beneficiaries, there may be various other estate administration details that need to be dealt with. One commonly overlooked aspect of an estate plan is addressing retirement accounts in Maryland or in any other state.
A will does not address how retirement accounts such as a 401(k) are distributed after one’s death. Most retirement accounts require a person to update beneficiary designations in order to ensure that intended beneficiaries receive funds stored in these accounts. Although a person’s will may state that all of a person’s assets should be given to his or her children, there may be some circumstances where this is not enough.
For example, if a person marries shortly before one’s death, it is possible that the person’s children will not receive funds stored in a 401(k) account if one does not update his or her beneficiaries with the retirement account. Without doing this, the funds in the 401(k) account may end up accidentally going to one’s new spouse instead. Essentially, a person may accidentally disinherit one’s children by overlooking this detail.
Of course there are various other aspects that must be accounted for when making plans for estate administration in Maryland or in any other state. This will require various types of legal documentation designed to protect one’s assets. The details of the estate plan will depend upon each person’s individual estate planning goals. However, no matter the estate planning goals, it is important to ensure that the relevant legal documents are properly drafted to avoid having the estate planning documents challenged in probate court.
Source: Forbes, “Americans’ Ostrich Approach To Estate Planning“, Richard Eisenberg, April 9, 2014