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Estate planning can be in vain if beneficiaries not updated

Time and money are often spent planning for the future. At some point in time, the average Michigan resident recognizes the need for estate planning. When this happens, a will or perhaps trust accounts are established, allowing the individual to specify exactly who should receive what upon his or her death. However, all of this hard work can be in vain.

The majority of accounts that involve money also involve beneficiaries. For example, when one purchases a life insurance policy, a beneficiary is named. In fact, it is even a good idea to name a contingent beneficiary. However, as circumstances change over time, it is possible that the individual named as beneficiary on the insurance policy is no longer the individual the policy holder wishes to benefit. However, even if another individual is named in the estate plan, if the beneficiary is not changed on the insurance policy itself, there will be problems.

Bank accounts are another area in which the individual must take care. In order to allow someone to pay bills and have access to needed funds, the individual may add someone to a bank account. If this is the individual who is to receive the funds in this bank account, there is little need for concern because in most cases this account will simply become the property of that individual upon the death of the account owner. However, again if this individual is not the intended beneficiary, there could be problems.

The estate planning process allows the Michigan resident to protect loved ones. As a part of the process, the individual establishes exactly who should receive what, or benefit, upon his or her death. An experienced estate planning attorney can assist in making sure that all the bases are covered; however, it is up to the individual to follow through and make sure that beneficiaries named on account documents match those named in the estate plan.

Source: wilmingtonbiz.com, "Incorrect Beneficiary Designations Can Undermine Estate Planning", Susan Willett, Sept. 1, 2017

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