Every Pennsylvania adult needs to have an estate plan. Estate planning may sound dry, depressing and boring. However, it’s one of the most important things you can do for your loved ones. Generally, people know that an estate plan involves a last will and testament. But beneficiary designations are also a key, and often overlooked, part of the estate planning process.
The limits of a will
A last will and testament makes it possible for you to dispose of your assets in the way you want. A will also gives you the opportunity to name an executor for your estate and a guardian for any minor children you’re responsible for.
However, a will won’t supersede other legally binding documents. One of the best examples of this is beneficiary designations. Often, people neglect to review the beneficiary designations on things like their life insurance policies and retirement accounts. Beneficiaries are also named for instruments like trusts that make it easier to pass on wealth to family members.
Neglecting this part of the estate planning process can sometimes lead to frustrating situations. It’s not uncommon for a life insurance policy to go to an ex-spouse, sibling or parent rather than the current spouse. You don’t want to make a difficult time even more painful for your family. That’s why it’s important to see estate planning as a lifelong process, not a one-time meeting to draw up a will.
Whenever you have a major life event, like a marriage, divorce or the birth of a child, it’s important to revisit your estate plan. If you have a work-sponsored insurance policy and retirement account, it’s also wise to review designations during the annual open enrollment period. Taking a few moments now to make sure everything is in order can spare your family a major heartache at an already trying time.