There are many individuals who understand the basic benefits of estate planning, but they fail to realize that leaving their beneficiary designations the same from their initial estate planning meeting can be devastating. This is because there are several assets that fall outside of management by a living trust or a will.
You need to ensure that these assets like life insurance plans, 401(k)s, IRAs, annuities, 403(b)s and pensions have clearly designated beneficiaries. Your living trust or your will does not control these items and an update in your living trust or will does not facilitate an automatic update of these other documents.
The law stipulates that assets such as your IRA are not subject to the probate process. Instead, they will pass according to the beneficiary you have outlined with the individual company. This is true unless there is no beneficiary designated or if you have designated the estate the beneficiary, in which case the will has ownership over the non-probate assets.
In a recent court case, the Supreme Court has stated that beneficiary designations listed on these non-probate assets such as retirement accounts, insurance policies, and IRAS overrides will beneficiaries in the event that there are differences between these two documents.
Setting up a meeting with a New Jersey estate planning attorney is one of the most important things you can do for your long term planning, but you need to visit your estate plan and beneficiary designations every couple of years as well to make sure that your documents and designations are in line with your individual needs.