<\/p>\n
You may not need to rewrite your will to change who inherits your assets.\u00a0<\/p>\n
But whether you do depends on a key distinction many households overlook, Harry Margolis, author of “Get Your Ducks in a Row,” said in a recent interview.<\/p>\n
Two key factors are how the asset is titled and whether it passes through probate.<\/p>\n
That distinction, Margolis said, can have real financial consequences, especially for retirement accounts, bank accounts, and estate plans that involve trusts.<\/p>\n
Below is a transcript of that interview, edited for clarity and brevity.<\/p>\n
Can you change beneficiaries without updating your will?<\/p>\n
Robert Powell: Is it possible to change your beneficiaries without rewriting your will? Here to talk with us about that is Harry Margolis. He is the author of “Get Your Ducks in a Row.” Harry, welcome.<\/p>\n
Harry Margolis: It\u2019s good talking to you, Bob.<\/p>\n
Robert Powell: It\u2019s always a pleasure, because you always have the answer to these common questions.<\/p>\n
When do beneficiary designations override your will?<\/p>\n
Harry Margolis: It depends to some extent on what you mean by \u201cbeneficiary.\u201d For many assets, you have a beneficiary designation that is totally outside of your will. For example, retirement accounts, investment accounts, and bank accounts.<\/p>\n
Your will does not affect those assets because it only governs probate property, meaning assets that pass through probate. When you name a beneficiary on an account, that asset does not go through probate. So you can change that beneficiary without changing your will, because they are unrelated.<\/p>\n
Where confusion can arise<\/p>\n
The problem is when your will says one thing and your beneficiary designation says something else. Legally, the beneficiary designation controls. But that mismatch can create confusion about your intent.<\/p>\n
For instance, if your will names one person and a beneficiary designation names someone else, and the will was created later, people may wonder whether you forgot to update the designation. That can lead to disputes.<\/p>\n
So yes, legally you do not have to change your will, but you may want to ensure everything is consistent or clearly explained.<\/p>\n
Beneficiaries vs. heirs and the role of trusts<\/p>\n
When people say \u201cbeneficiary,\u201d they might also mean beneficiaries of a trust or individuals named in a will. Technically, those who inherit under a will are called heirs.<\/p>\n
If you are talking about beneficiaries of a trust, then you would need to amend the trust to make changes. Often, when someone has both a revocable trust and a will, the will simply directs that all assets go into the trust. The trust then determines who ultimately receives the assets.<\/p>\n
That structure allows you to make changes by amending the trust, which is often simpler than changing a will.<\/p>\n
When you must change the will<\/p>\n
Robert Powell: Let me give you an example. Suppose I have an antique typewriter collection that I leave to my son in my will. Later, I decide my daughter should receive it instead. I would have to change the will, correct?<\/p>\n
Harry Margolis: Yes. In that case, you would need to change the will because those assets pass through probate.<\/p>\n
You could do that with an amendment, called a codicil, or by creating a new will. In most cases, we prepare a new will. It\u2019s often just as easy, especially if you work with the same attorney who has your original document.<\/p>\n
Another reason to create a new will is privacy. A codicil creates a record of changes. With a new will, only the final version controls.<\/p>\n
Key takeaway: Know what passes through probate<\/p>\n
Robert Powell: So the key is understanding which assets pass through probate and which do not.<\/p>\n
Harry Margolis: Exactly. Only probate assets are governed by your will. For everything else, you change the beneficiary designation directly.<\/p>\n
Related: Who will care for your kids if you can\u2019t?<\/p>\n
#Changing #beneficiaries #Heres #mistake #avoid<\/p>\n","protected":false},"excerpt":{"rendered":"
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