Law Office of Amy B. Van Fossen, P.A. - Elder Law

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Wills and benefits

Many Florida residents mistakenly believe their estate plan is complete once they execute a last will and testament. After all, they met with their attorney on one or more occasions and made sure their will contains the necessary provisions and the proper beneficiaries. What they may not realize, however, is that a will does not control the distribution of certain assets when a person dies. This is especially true for an estate containing company benefits.

What often happens is that a new employee is asked by Human Resources to complete a stack of paperwork, which the employee may or not remember in later years. On forms pertaining to employee benefits, the employee is asked to name beneficiaries. The normal course of action for a married person with children would be to name the employee’s spouse as the primary beneficiary and the employee’s children as secondary or contingent beneficiaries.

Once that person dies, his or her estate goes through a probate process, wherein a named executor distributes assets in accordance with the person’s will. However, company benefits with named beneficiaries are not included in the probate process. Typically, these include such assets as retirement plans, life insurance and stock options. Unless the forms have been updated, those benefits will be distributed to the beneficiaries named in the original documents.

This dilemma points out the importance of making sure that an estate plan includes all assets and that those assets will be distributed to heirs in accordance with the estate owner’s wishes. A good estate plan will also help reduce taxes and minimize family disputes. However, drafting estate planning documents requires a thorough knowledge of the law, and most individuals will find it necessary to enlist the services of a law firm with experience in estate planning.