Estate planning involves various elements, including creating a Will and designating beneficiaries for certain assets. In New York, as in many other states, beneficiary designations override a Will. As such, beneficiary designations can have a significant impact on the distribution of assets. In this blog post, we’ll explore how beneficiary designations override a Will in the state of New York.
Understanding Beneficiary Designations:
Beneficiary designations are instructions that you provide for specific assets, such as retirement accounts, life insurance policies, and payable-on-death (POD) or transfer-on-death (TOD) accounts. These designations specify who will receive the assets upon your passing.
How Beneficiary Designations Override a Will:
1. Direct Transfer of Assets: Assets with designated beneficiaries typically bypass the probate process and go directly to the named beneficiaries. This means that the assets are not considered part of your probate estate.
2. Contractual Agreements: When you designate a beneficiary for an asset, you enter into a contractual agreement with the financial institution or insurance company. This agreement legally binds them to distribute the asset to the designated beneficiary upon your death, irrespective of the instructions in your will.
3. Legal Precedence: New York state law generally upholds beneficiary designations as legally binding, prioritizing them over the terms of your will. This ensures that your wishes regarding these specific assets are honored.
Assets Subject to Beneficiary Designations:
Common assets subject to beneficiary designations include:
• Retirement accounts (e.g., 401(k)s, IRAs)
• Life insurance policies
• Bank accounts with POD or TOD designations
• Investment accounts with transfer-on-death designations
When a Will Matters:
While beneficiary designations can override a will for designated assets, a will remains important for other aspects of your estate plan, such as:
• Distribution of assets not covered by beneficiary designations, such as a House or a Cooperative Apartment
• Naming guardians for minor children
• Appointing an executor to manage your estate
• Instructions for the disposition of personal property
Conclusion:
In New York, beneficiary designations carry substantial weight and can override the instructions in your will for specific assets. It’s crucial to review and update your beneficiary designations regularly to ensure they align with your overall estate plan. Additionally, consult with an experienced estate planning attorney to create a comprehensive plan that considers both wills and beneficiary designations to achieve your desired distribution of assets and legacy goals. Keep in mind that laws and regulations can change, so staying informed and seeking professional guidance is essential for effective estate planning.
For more information, please contact NYC Probate Litigation, Guardianship, NYC Probate and Estate Planning attorney Regina Kiperman:
Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com
Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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