The following is an excerpt from A Parent's Guide to Wills & Trusts: For Grandparents, Too (2nd edition), copyright 2007, 2008 Don Silver and excerpt reprinted with permission.
QUESTION: It has been over 30 years since my husband and I signed our last wills. Our kids were so small then. I guess the wills aren’t good anymore since so much time has gone by. I sure hope so because in the wills we named my brother as the executor and he’s the last person we’d want as our executor now. Would our wills still be valid even though the paper has yellowed through the years?
Yes. A vintage wine may mellow and an old will may yellow, but only one of them may be easy to swallow.
HINT: Run, don’t walk, to get help if your will or trust is out of date.
QUESTION: I am a widower. Many years ago, I named my brother as the beneficiary of my life insurance, IRAs and retirement plans. That’s all I really have. Now I don’t want my brother to receive those benefits when I die. I want my daughter to get the benefits. I recently signed a new will naming my daughter as the only beneficiary of my estate. Should I bother to take the time to fill out new beneficiary forms or does my new will automatically protect my daughter?
Usually, beneficiary designations have a life of their own outside of your will or trust. In general, your will or trust will not override the beneficiary designations naming your brother. So, why leave any doubt as to your intentions?
You’ll want to fill out new designation forms as soon as possible naming your daughter as the primary beneficiary (be sure to fill in a secondary or contingent beneficiary designation, too).
Make sure your intentions are clearly stated
If the beneficiaries in your will or trust differ from those selected in other designations (e.g., life insurance, retirement plans and IRA beneficiary designations), you may want to make it clear in your will or trust or in a separate, notarized letter saying that this has been done intentionally. This can help avoid costly fights and help keep family harmony by clearly spelling out your intentions.
Avoid having benefits paid to your estate
The reason it’s important to complete a secondary or contingent beneficiary is that in many cases the benefits will be paid to your estate if your primary beneficiary dies before you and you haven’t named a second choice.
There are two main problems with these benefits going to your estate. First, the benefits probably will be subject to legal fees and also delays in a probate that might otherwise have been avoided. Second, if the benefits are paid to your estate, you may have converted an asset that was exempt from creditors’ claims into one that may be taken by creditors.
HINT: To reflect your current intent, always keep your beneficiary designations up to date.
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