Some New York residents may not realize that wills are not the only method by which a person's assets can be posthumously transferred. Many types of assets contain beneficiary designations that allow them to be passed outside of probate. Beneficiary designations made without the proper amount of planning can have lasting financial consequences, so it is important to take them into account during the estate planning process.
It is important when determining appropriate beneficiary designations to consider the other steps that have been previously taken. Many people do not always coordinate the communication between their legal and financial advisers, but this can be essential to effective estate planning. It is also important to assess whether a will is attempting to provide for the assets that are subject to beneficiary designations, as those designations will supersede any contrary provisions in a will.
A variety of a decedent's assets can be distributed through beneficiary designations, often without proper planning or advice. Life insurance policies, annuities and retirement plan accounts are just a few of those that will pass outside of probate. Many people do not properly communicate with their heirs about which assets will be received by whom, which can lead to familial strife. In other cases, life changes such as a divorce, remarriage or the birth of a new child may necessitate a review and revision of the designations.
There are many factors to consider when determining whether the provisions of a trust, a will or a beneficiary designation will govern. An attorney who has experience with these matters may provide guidance about when it may be appropriate to update existing estate plan documents.