COVID-19 UPDATE: In response to the COVID-19 outbreak, our office will remain fully operational with plans to accommodate current and new clients via telephone or virtual meetings, as well as the ability to conduct easy, no-contact signings of estate planning documents. We will continue to monitor the situation as it develops, and remain committed to maintaining the safest possible environment for our staff and clients

Help With Family,
Finances And The Future

Will intended beneficiaries recieve assets of New Jersey estate?

| Dec 16, 2013 | Heirs & Beneficiaries

When it comes to estate planning, many New Jersey residents already know that wills and/or trusts are important documents for transferring assets upon death. However, there are many assets such as life insurance policies, investment accounts and retirement accounts that do not pass through probate. Bequeathing those assets in a will does not ensure that the intended beneficiaries actually receive the assets.

These assets pass by beneficiary designations. If those designations are not kept up to date, the asset passes to the last beneficiary designated. For instance, when a man passed away in 2008, proceeds from a life insurance policy went to his former spouse instead of his current spouse. When the man remarried, he failed to update the beneficiary designation on that policy.

A lawsuit was filed in an attempt to nullify the beneficiary designation and keep the man’s former spouse from inheriting the funds. The case was appealed to the U.S. Supreme Court. This year, the court ruled that the beneficiary designation on the policy controls who receives the proceeds from the policy regardless of any other potentially intervening factors, such as the man’s remarriage. Therefore, the decedent’s ex-wife was entitled to the policy’s proceeds.

Most New Jersey residents know to review their estate planning documents when a major life change such as a divorce takes place. At that time, any accounts requiring beneficiary designations need attention as well. Changing the beneficiaries of these policies and accounts that pass by the operation of law may require additional paperwork. Ultimately, it will be worth the time and effort to ensure that the person intended to inherit the asset will do so.

Source: journalnow.com, Growing Older: Simplifying Inheritance for Your Heirs, Larry Hungerford, Dec. 8, 2013

Archives