How could this happen?

One of the worst things a family can go through is probate. Probate is the judicial process by which a decedent’s estate is valued, beneficiaries are determined, an executor in charge of estate distribution is declared, and the estate is legally transferred to the determined beneficiaries. Probate is very public, and the results may not be what the deceased had intended. Even worse, is when there is a specific place to name a beneficiary, thus avoiding probate, and that place is skipped. On top of that error, having a retirement account managed through a large, national company, and their representative does not take time to alert an employee that they did not name a beneficiary. This is the case for a client whose parent did not name beneficiaries on their 401k.
The parent lived in another State, so my client now has to brush up on that State’s probate law, hire an attorney in that State, and see this process through. It is hard enough dealing with the loss of your parent and the loss is compounded by the now necessary probate process.
Your will or trust will not override what is named in the beneficiary designation on a life insurance policy, annuity, or retirement account (like an IRA or 401(k) plan). As you gather with your family for the holidays, bring this topic up. It may not be in the holiday spirit, but it can be a short conversations that saves time, money, and anguish later in life.


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