Many Washington residents think their will covers all their assets after death. But here’s a key fact: beneficiary forms often override what’s written in your will. This oversight leads to assets going to unintended people, even with a properly written will in place.
What are beneficiary designations?
A beneficiary form tells banks, insurance companies and investment firms who should get your assets when you die. These forms control several types of accounts and assets:
Think about these common assets that need beneficiary forms:
- Life insurance payouts
- 401(k) accounts and IRAs
- Investment and brokerage accounts
- Bank accounts marked “payable on death”
- Property with transfer-on-death deeds
Each asset will go directly to the person you name, no matter what your will says.
Key rules for naming your beneficiaries
Before you fill out any beneficiary forms, keep these Washington state rules in mind:
- Check your forms yearly, especially after significant life changes
- Name backup (contingent) beneficiaries for each asset
- Get your spouse’s written OK to name others on retirement accounts
- Remember that divorce cancels ex-spouse beneficiary rights
- Know that different accounts have different tax effects on beneficiaries
These rules help ensure your assets go where you want them to go.
Necessary steps to protect your choices
Take these actions to keep your beneficiary choices current:
- Get copies of all your current beneficiary forms.
- Mark your calendar for yearly beneficiary reviews.
- Tell your executor where to find your beneficiary paperwork.
- Keep beneficiary information with your other essential documents.
The rules about beneficiaries in Washington can trip up even careful planners. One wrong move could send your assets to the wrong person or create tax troubles for your loved ones. A local estate planning lawyer can help you check your beneficiary choices and ensure they match your goals.