Beneficiary designations v. Your will.

Can your beneficiary designations change what you have in your will? NO.

Can your will change your beneficiary designations? NO.

When you die, you cannot own anything.  That is the general way to approach how you pass on your money, things and property when you die.  So when you die, it has to go to someone or somewhere.

There are a few ways this happens; we will talk about two of them: beneficiary designations and your will.

A beneficiary is merely someone who will “benefit” and receive something when someone dies.*  A beneficiary designation is the designation someone makes on particular types of accounts, life insurance policies, retirement assets, stock, CD’s.  It is important to know all the types of things you own which has a beneficiary designation.  You would be surprised!

A will passes on those things that you have NOT indicated a beneficiary designation or would pass otherwise by the way it is owned.

Example: A life insurance policy.  You name your daughter Samantha to receive the entire policy.  She has been designated the beneficiary at 100%.  You name your other daughter, Suzy, as the contingent beneficiary.  Meaning, if Samantha dies before you, Suzy receives the entire policy.  But Suzy will not receive anything if Samantha is alive.

Example: You own a home by yourself.  You are the only name on the deed.  You want the house to go to Samantha.  There really isn’t a way to name a beneficiary on your home in Georgia.  So you need to have a last will and testament and have it specifically state that the home goes to Samantha.  If you do not, then there is a chance that Samantha and Suzy will BOTH receive your home, equally.  Which means that it will likely be sold and half to Suzy and half to Samantha.

It is important to understand, also, that if you say in your Will, “I give the home to Samantha and I give the insurance policy to Suzy” it will not turn out that way.  Why? Remember you named Samantha (NOT SUZY) as 100% beneficiary of your life insurance policy!  Which means that under your will, Samantha gets the house.  Under your beneficiary designation, Samantha gets the life insurance and your will has zero ability or influence over the beneficiary designation.  Samantha will get all, Suzy will get nothing.

Bottom line, it is important to look at each and everything you own and have (your assets) and then decide what you want overall to happen when you die: who gets what.  And sit with your alpharetta estate planning attorney and work with your financial advisor to make sure that everything is in alignment with what you want and up to date.  A wills attorney can help you and work with your other professionals to make sure that your estate plan lines up with want you want in your Will and your other assets.

If you wish to set up a time to talk with our team, call us today for a strategic consultation.  Our team can be reached at (770) 508-6525.

We look forward to helping you protect who you love the most.