Admonitory planning stories: no dearth of these frightful tales

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Some of the stories related in a recent estate planning piece might reasonably be termed as “outlier” tales stressing truly dire ramifications that can ensue when a planner fails to take some requisite action that promotes certainty regarding a future outcome.

Alternatively, they might be denoted as “the worst that could happen” tales.

Here’s one, which underscores the flat importance attached to either ticking off a box or failing to do so.

To wit: A recently divorced pensioner and life-insurance policyholder intended all related benefits and proceeds to go to his children from a former marriage upon his death, with nothing going to his ex-wife.

In the wake of an auto accident that took his life, things turned out decidedly differently. In fact, the former spouse took everything, because the decedent had failed to complete the quick and simple task of changing elections on his beneficiary forms.

Such a story is less of an anomaly than many readers might think, with the above-cited media report focusing upon estate planning “horror stories” linked with infirm beneficiary designations making this essential point that is commonly misunderstood in the general public: Concerning many accounts and investments, it is that beneficiary designation — and not any stated intent expressed in a will — that determines where money will flow after death.

As Market Watch notes, “As a general rule, whoever is named on the most recent beneficiary form will get the money automatically if you die — regardless of what your will or living trust papers might say.”

That reality should wake a number of people up, motivating them to timely and periodically review designations for accuracy.
As seen, failure to do so can bring dire repercussions.

A proven estate planning attorney will assuredly bring up the subject of beneficiary designations during a client consultation concerning sound and tailored planning execution, as well as encourage planners to occasionally review and update designations if/when it becomes necessary to do so.

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