There is a common misconception regarding beneficiary designations. The person you list on your beneficiary designation for a life insurance policy, retirement account, or bank account will receive that asset regardless of what you have in your Will.
In fact, your beneficiary designations avoid Probate. By avoiding Probate these assets go directly to the beneficiary listed. It is possible for this asset to pass through Probate.
If you list your Estate as beneficiary or if the person listed (and contingent beneficiaries) are deceased the asset will not avoid Probate. This substantially increases the costs of administration and makes the asset subject to creditor claims.
The most common estate planning mistake is to have an out-of-date beneficiary designation. For example, if you are recently married (or divorced) you may not have updated your beneficiary designations. Even if you updated your Will to add (or remove) a spouse the beneficiary designation controls who receives the asset.
Review your beneficiary designations regularly to ensure the provider has the correct person listed. You can consult with your human resources department or financial advisor to verify your designations are up-to-date.
A Will allows you to: Name a Guardian to care for your minor children, Appoint an Executor, and Control the division and final distribution of assets titled in your name.
Naming a Guardian
Appointing a Guardian for your children if you are gone can be a difficult, but very important decision. This individual takes parental control of minor children if both parents are deceased; unless a judge decides the Guardian unfit.
Naming an Executor
Your Will appoints an Executor to oversee the distribution of assets after your life. This individual, along with your Probate Attorney, manages the distribution process.