When you write a legally-binding will in Minnesota, the state has to abide by your decisions–with one exception. The beneficiaries that you list on bank accounts and insurance policies override anything that you state in your will. If you’re not careful, this could lead to unintended consequences.
How can you ensure that your assets go to the right people?
Certain assets like bank accounts, retirement funds and life insurance policies give you the opportunity to name a beneficiary. When you die, the funds will immediately go to the beneficiary that you chose. They won’t even have to deal with the probate process. In the world of estate planning, the designated beneficiaries override everything else, even if you named other beneficiaries in your will.
For this reason, it’s important to stay on top of your beneficiaries. Normally, former spouses aren’t entitled to a share of your estate after you die. However, if you get divorced and forget to update your beneficiaries, your former spouse might get your savings account and life insurance policy after your death. An estate planning attorney could advise you on the best times to update your beneficiaries.
If you don’t name a beneficiary at all or the beneficiary is deceased, a judge will decide who gets your assets. This could have unintended consequences if you’re estranged from certain family members. Choosing your beneficiaries isn’t something you do once–it’s something you periodically review for the rest of your life.
How often should you update your beneficiaries?
An attorney could give you more advice for your specific situation. Generally, you should update your will and beneficiaries every time you undergo a major life change. This could include having kids, getting divorced or moving to a new state. You might also end up disinheriting certain family members.
