There is no document in your parent’s estate plan that does more damage when it’s wrong than a beneficiary designation.
The will gets all the attention. People talk about it, plan around it, contest it in court. Meanwhile, sitting quietly inside every retirement account, life insurance policy, annuity, and certain bank accounts is a separate document that passes outside the will entirely and pays directly to whoever is named on the form. The beneficiary designation overrides everything. A 30-year-old form will pay an ex-spouse $300,000 the day after your parent dies, and no will, no court ruling, and no family meeting can stop it.
This post is the practical companion to Estate Planning Checklist for Adult Children and Probate Court Basics for Inheritance Disputes. Seven specific beneficiary mistakes that show up over and over in adult-child caregiving situations, what each one actually causes, and how to fix it before it costs the family.
[Read more…] about 7 Common Beneficiary Mistakes to Avoid