Strategy! Using Designated Beneficiaries in Estate Planning.

Updated: Aug 20

Estate planning, specifically, the designation of beneficiaries, plays a critical role in the designation and managing of an asset owner's assets upon death or incapacitation of the owner (asset holder). Designating a beneficiary(s) for large financial assets such as bank accounts, investment accounts, life insurance policies, annuities, 401-Ks, etc. can aid in navigating around probate as the designated beneficiary will take precedent over a will. This means that upon death, the beneficiary designations become immediately active and override any information pertaining to inherited assets set forth in the will by the owner (testator) that do not name a designated beneficiary.

  • The will distributes the testator's “probate assets” that are part of the estate, meaning the assets that are in the testator’s sole name without the designation of a beneficiary.

  • The assets set forth for the designated beneficiary will not have to go through probate, which can be time-consuming and expensive.

It is important to review your designated beneficiary(s) on a regular basis and ensure all information is up to date with any major life events (death, divorce, marriage, name change, etc). One may name contingent beneficiaries, or back-up beneficiaries, should the primary designated beneficiary become deceased or incapacitated.

If you hold assets such as bank accounts, investment accounts, and life insurance policies, you should consider designating beneficiaries on the accounts. If you do not have an estate plan or asset protection strategies in place, contact Pacific Apex Law Group at (888) 609-8718 and speak with Pete Peters. He thoroughly enjoys working with estate planning clients!

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