Can an estate planning attorney help with non-probate assets?

On behalf of Scaringi Law posted in Estate Planning on Friday, June 5, 2015.

A recent article reminds us of the importance of coordinating beneficiary designations on non-probate assets with other estate-planning documents, such as trusts and a will.

There are many examples of non-probate assets that can pass to a named beneficiary without court involvement. Life insurance is probably the most common example, where the benefit typically passes to the named beneficiary upon submission of a claim form and death certificate. Retirement benefits are another common example. Annuities, 401(k) accounts and IRAs or Roth IRAs are all typically transferred by beneficiary designations.

Unfortunately, individuals may recognize the importance of updating their estate plan after life changes but fail to consult with an attorney regarding the procedural requirements. For example, an individual may attempt to use his or her will to name a different beneficiary of a life insurance or retirement account. Unfortunately, a provision in a will generally has no legal authority over a non-probate asset, as wills govern the transfers of probate assets. Consequently, the asset would pass to the outdated beneficiary unless the designation was changed in the account itself.

Yet even non-probate assets may require an attorney's advice. For example, there may be payment options in a life insurance policy, with choices including a lump-sum payment, period certain annuity or life annuity. Retirement accounts may also have similar options regarding beneficiary payments. If tax-deferred, an account may also have required minimum distributions. An attorney can explain these options, perhaps including documentation that will also provide guidance to beneficiaries.

Source: Forbes, "Your Will And Trusts Aren't Enough: Using Beneficiary Designations As An Estate Plan," Jamie Hopkins, June 2, 2015