Many Tennessee residents are not as vigilant as they should be about their account beneficiary designations. They may not realize the power that the designation has. As a result, they need to periodically review each of their accounts and make sure that the listed beneficiary is still valid and correct because whatever is listed on the account controls its distribution.
Those who think that all accounts are covered by the will are incorrect. Any account that requires a beneficiary is distributed outside of probate. This includes life insurance and retirement accounts. These can be major assets potentially worth millions of dollars. Even if the accounts are smaller, one still must pay close attention to them. There are countless stories of families who have seen money go to ex-wives because a person lost track of an old account and never changed the beneficiary designation.
Moreover, people fail to anticipate contingencies. An account can be thrown into uncertainty because the beneficiary died before the account holder. As a result, it is best to make an exhaustive list of every possible account, including those from old jobs that may have been orphaned. Then, one should look at the account every couple of years or so, even if it is just in passing, to make sure that the beneficiary designation is still valid. This can save many headaches in the future.
One person who could help with this process is an estate planning attorney. He or she could help their client understand where their beneficiary designations fit in the scheme of things. They may look at these beneficiary choices in conjunction with an overall review of their client’s estate plan. They might suggest changes after a comprehensive review or may alert the client to the rules surrounding their choice of beneficiaries for their accounts.