Tip – Remember to check your beneficiary designations on insurance policies, IRAs, 401Ks, and investments.

The daughter of one of my clients came to see me about her mother’s estate after her mother had passed away. She said that her mother had several investment accounts and that her mother’s investment advisor had told her to talk with me because she needed to file for probate. She began by explaining that her mother had named her children as the beneficiaries on her accounts. At this point, I stopped her to explain that if the children are named as beneficiaries, there was no need to probate. All that the daughter needed to do was contact the company, fill out their form, and provide them with a death certificate.

”Why then did he tell me I needed to file for probate,” she asked. Not knowing, I called the advisor and asked him. He explained that the mother had 5 different accounts and that 4 of them named the children as the beneficiaries, but unfortunately there was one annuity with no beneficiary designation. The funds in that account could only be released to the personal representative of the
mother’s estate. My client had no other reason to file for probate other than this one annuity. This is a situation that I occasionally encounter.

In some cases, people intentionally name their Estate as the beneficiary of their investment accounts. They name their estate to provide funds to the estate to pay final expenses and creditors. However, if there is no need to fund the estate, by naming the beneficiaries correctly, probate can be avoided.

In Idaho, probate is efficient, timely, and inexpensive when compared to some other states. Nevertheless, it still can take several months to go through the process. Whereas if you name your children as the beneficiaries on insurance policies and investment accounts, the money goes straight to them without much delay.

Because I have had this experience repeatedly, I encourage my clients to review all their investment accounts and check their beneficiary designations to make sure their assets are going to the persons or entities that they want them to go to. Even if you are sure that the designations are correct, checking each one is worth the effort.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

April 2022