Update All Beneficiaries at the Source, Not in Your Will

Do you have any financial documents with a beneficiary, e.g., a life insurance policy? Maybe you have a retirement fund with a beneficiary who is supposed to get the contents of that fund when you pass away.

As you write your will, you may think it’s easy to adjust things. Just name who you want to get the money in the will. Right? Isn’t that the whole point of the will?

Distributing assets, of course, is the point of your will. However, the beneficiary designations usurp all other paperwork in your estate plan, including your will. You have to go to the source and update the beneficiaries there or the company will not honor any changes.

For instance, maybe your life insurance policy names your first child only. You now have two children, and you want them to split it. If you add a note to your will saying that they need to split the money, it does tell them what you want, but they have no legal obligation to do what you want. The first child is going to get the entire payout from the insurance company, which does not care what is in your will. Your firstborn then can choose what to do with that money. If they want to keep it and not share it with their sibling, they have the legal right to do so.

Do not do your estate planning halfway. Don’t assume anything about the plan. Always take the time to really look into how the documents work together and what steps you need to take to make sure your wishes are honored.