Your estate plan is the final say on what to do with all of the assets you own. It gives you the option of dividing your wealth between your heirs and other beneficiaries. It is very important to you to do this the way you want.
However, they also have some accounts with recipient names. These can be retirement accounts, life insurance, and even some bank accounts. If the denominations deviate from the estate plan, which side wins?
The names have more weight
Contrary to what many people believe, your estate plan will not be considered in such a situation. The names of the beneficiaries come first and therefore have more weight.
For example, imagine you have a life insurance policy that only names one child as the beneficiary. However, they actually have three children. Your estate plan says that once the money from the policy is deposited into your assets, it should be divided into three ways.
Here’s the problem: it will never pay off in your estate. Once you die, life insurance will follow the label and pay for the one child that is named.
In this case, the money becomes your child’s money, not yours. No matter what you put on your estate plan, it cannot dictate what to do with someone else’s money. The other children will only get a cut if their sibling agrees to give it to them.
Bring them together
This example shows you why it is so important that both areas match. Make sure you know exactly what steps to take.
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