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Wills and beneficiary designations important in estate planning

The estate tax exemption at the federal level today is more than five million dollars. Thus, the tendency in New York and other estates is to think that estate planning is not a concern for those who are not wealthy. The truth is that creating wills and updating beneficiary designations is important for everyone no matter what his or her net worth or income may be.

When it comes to beneficiary designations in particular, checking them for bank accounts and life insurance policies is paramount in order to protect these assets. Designations also need to be checked for retirement accounts and brokerage firm accounts. Beneficiary designations for these assets ideally need to be checked and updated regularly.

Not keeping beneficiary designations up to date can cause big problems for intended heirs, particularly when stepchildren are in the picture, or if a divorce has taken place. However, outdated beneficiary designations can also be problematic if the owner of the assets featuring the designations becomes disgusted with a certain offspring and wants to avoid passing down money to him but fails to remove him as a beneficiary. In other cases, a parent may newly wish to leave more life insurance benefits to the adult children who have large families and then less to the childless heirs, but this will not be possible if the beneficiary designations do not reflect this arrangement.

Creating wills and completing other estate planning steps is important for ensuring that all assets owned go where intended. However, the process of developing a well-thought-out estate plan can understandably be complicated and overwhelming. An attorney in New York can provide guidance with each step to make sure that one's wishes are upheld in the long run.

Source: marketwatch.com, "Make this estate planning move right now: Check your beneficiary designations", Bill Bischoff, June 30, 2017

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