Many people in Texas take it lightly when they are asked to designate a beneficiary for a retirement or other type of account. This can cause them all sorts of problems in the future if they were to pass away. It could even lead to assets going to an unintended person because one was inattentive.
One major mistake that people make is thinking that the probate and will process controls all asset distribution. However, beneficiary designation occurs outside of the will process. Whatever beneficiary choices one makes are enough to take precedence over the will. This can include major assets such as life insurance. Thus, major assets are actually not part of the estate and are distributed to beneficiaries well beforehand.
Many people make the mistakes of the accounts falling through the cracks. They may often lose sight of old retirement accounts from previous jobs and fail to change the beneficiaries. This could result in someone such as an ex-wife obtaining assets many years after the divorce. They may also not plan for contingencies such as a beneficiary dying before them. As a result, people need to undertake regular reviews of their account beneficiary designations every several years. They should periodically rethink their circumstances to make sure that there are not any unintended results and the right people are in line to receive the assets.
Reviewing beneficiary designations can be done as part of the estate planning process even though they are not part of the will. An estate planning attorney could help their client come up with a comprehensive estate plan that can ensure smooth passage of assets to others and take care of those close to their client. The lawyer may draft the relevant documents for their client’s signature and review all of the beneficiary designations on their client’s accounts.