A will is an important part of an estate plan. However, it does not control all assets. In Oregon, some assets pass by beneficiary designation rather than under the terms of a will.
What assets usually pass outside a will?
Life insurance policies, retirement accounts and certain payable-on-death accounts generally pass to the beneficiary designated in the account or policy paperwork. In many cases, that designation controls who receives the asset. These assets may include:
- 401(k) plans
- IRAs
- Life insurance policies
- Annuities
- Payable-on-death bank accounts
- Transfer-on-death investment accounts
Because these assets often pass outside probate, their distribution is typically unaffected by a will.
Why outdated beneficiary forms can cause problems
Life events can make old beneficiary forms inconsistent with your current wishes. Marriage, divorce, the birth of a child or the death of a named beneficiary may all require a review of your designations.
A divorce may affect beneficiary rights in some cases, contingent on the specific account and governing law. Retirement accounts may also be subject to special rules, so they should be reviewed carefully.
How to keep your plan current
Review beneficiary designations whenever your family or financial situation changes. Confirm the current beneficiary on file with each bank, insurer or plan administrator.
Keep copies of all beneficiary forms and make sure they are consistent with your will and other estate-planning documents. If your wishes change, update the account forms directly rather than relying only on a new will.
Why this matters
If your will and beneficiary forms do not match, the beneficiary designation might control the asset. That can produce results you did not intend.
An Oregon estate-planning attorney can review your documents together and help ensure that your plan remains consistent and complete.