We generally recommend that our clients review their estate planning documents at least every three years, but major life events – births, adoptions, disabilities, deaths, marriages, divorces and moving – should also trigger a review and update of your estate planning documents. We also strongly recommend a periodic review of beneficiary designations.
Beneficiary designations are a crucial part of the estate planning process, though often overlooked, because they take precedence over the conflicting terms of a will or trust agreement and pass outside of probate.
Many clients also find that a significant portion of their wealth will pass at death by beneficiary designation. Common examples include life insurance, retirement plans, individual retirement accounts (IRAs), bank accounts and annuities. In Ohio, an individual may even transfer real estate at death pursuant to a Transfer-on-Death Designation Affidavit. For most people, these examples represent the majority of their total overall assets.
It is important to realize that while beneficiary designations are a valuable tool, they must be considered as one part of the overall estate plan. We strongly advise that when clients review their estate planning documents, they also review and update their beneficiary designations to ensure their assets are properly passed on.