Checking Beneficiary Designations Before Wrecking Your Estate Plan

Upon death, one’s assets may be transferred to beneficiaries in a variety of ways. Assets such as life insurance policies, trusts, annuities, and retirement accounts commonly have a beneficiary designation. This means that, upon death, title transfers to the named beneficiary (or multiple beneficiaries). Generally, the named individual will present a death certificate to the financial institution and complete proprietary paperwork, prior to the monies being released or rolled over into another account.

Assets that are held jointly between individuals pass to the surviving owner upon the first owner’s death. This applies to financial accounts and real estate. Often this kind of joint ownership is seen between spouses or an elderly parent and adult child. The account or property may be titled in a number of ways, but often as “joint tenants with rights of survivorship.”

Finally, assets held in an individual’s name listing no beneficiary and bearing no joint owner, must pass via a last will and testament or by the state’s laws of intestacy, depending on whether the decedent died with or without a last will and testament. Therefore, a house owned by an individual will need to be included in a petition for the probate of a last will and testament so that the probate court may issue Letters Testamentary to the nominated executor. Upon receiving authority, the executor will distribute the asset pursuant to the terms of the last will and testament.

Assets passing outside of the last will and testament, via joint ownership or named beneficiary, pass by what is often known as “operation of law.” These assets do not get included in an inventory of probate assets and with a properly named beneficiary, they do not fall under the jurisdiction of the probate court. Practically, the beneficiary designations of these assets are much more difficult to challenge because notice is not given to next-of-kin as to their existence. This is different than individually owned assets that pass via a last will and testament or by intestacy, wherein the next-of-kin is informed of the estate proceeding, regardless of whether they are listed in the last will and testament. The notice gives the relative the opportunity to challenge or accept the last will and testament and its provisions.

It is not impossible, however, to contest a beneficiary designation under an operation of law asset. The news reports that a lawsuit was recently filed in Pennsylvania by Lance Tittle, the brother of Kent Tittle, who died last year. Lance Tittle alleges that a Morgan Stanley beneficiary designation form discovered in his brother’s home after his brother’s death leaves his Morgan Stanley financial account to Lance. Morgan Stanley does not have a record of a designated beneficiary on the decedent’s IRA account. When there is no beneficiary listed on an account, the asset passes to the decedent’s estate, who in this case would be Kent Tittle’s children. Lance Tittle alleges that his brother wished to disinherit his children and his ex-wife. Morgan Stanley will not name Lance Tittle as beneficiary unless directed by a court. Lance Tittle has retained a handwriting expert to demonstrate the authenticity of the beneficiary designation document.

Questions as to beneficiary designations can arise after death. Often family members are surprised to find that they have been removed in place of someone else. Conversely beneficiaries are sometimes pleasantly surprised to find out that the beneficiary designation was never changed, despite the fact that there was a breakdown in the relationship between the account owner and the named beneficiary. Too often, no beneficiary is listed, and the last will and testament or state laws of intestacy determine who gets the asset. In this case, the beneficiary may not be in sync with what the owner intended.

When engaging in estate planning, it is imperative that one requests all beneficiary designation forms from their financial institutions to confirm who is the named beneficiary. Family structures change and relationships often fail. Assets that pass by beneficiary designation are supposed to make transfer of assets easy, as they avoid court. It is important to confirm that those listed are still a part of one’s life and are worthy of one’s hard earned estate.

Cori A. Robinson is a solo practitioner having founded Cori A. Robinson PLLC, a New York and New Jersey law firm, in 2017. For more than a decade Cori has focused her law practice on trusts and estates and elder law including estate and Medicaid planning, probate and administration, estate litigation, and guardianships. She can be reached at 

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