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Beneficiary Designations and Asset Titling

The disposition of certain assets usually is not governed by a person’s trust or will.

This includes items such as life insurance, IRAs, 401(k) plans and other retirement plans, the disposition of which is governed by beneficiary designations rather than trusts or wills.  Accordingly, the beneficiary designation on any items of this nature should be reviewed to make certain that they correspond with the provisions of trusts or wills. Periodic review of beneficiary designations as well as alternate or contingent beneficiary designations is prudent.

Jointly owned property is also not governed by a person’s trust or will. If you own any property with another person “as joint tenants with rights of survivorship”, should you die first, that property passes to the surviving joint tenant and is also not governed by your trust or will.  It is also possible to have certain accounts, such as a bank account or brokerage account with a TOD or POD (“transfer on death” or “pay on death”) beneficiary designation.

Pursuant to that designation, you have entered into an arrangement with the bank or brokerage company to transfer those assets on death to a named beneficiary. Again, if you have done that, the disposition of those assets is governed by whoever is the transfer or pay on death payee, not by the provisions of your trust or will.

The point, of course, is to make certain that all assets, both those that pass pursuant to your trust or will and those that pass by beneficiary designation, joint ownership or otherwise, are disposed of in a manner that is consistent with your estate plan.