Dana Carlson Gentry, Esq., Board Certified in Wills, Trusts & Estates
If you have a small life insurance policy or small IRA worth between $2,500 and $15,000, have you checked your beneficiary designation on these assets lately? One situation I see in my practice after the death of a client is the family’s discovery of an insurance policy or IRA which has no living primary or contingent beneficiary. This occurrence necessitates the opening of a small probate estate summary administration to distribute such assets to the intended individual beneficiaries. Summary proceedings are not simple anymore. Between court costs, attorneys’ and other fees such a small asset’s value will be reduced even more.
You should review these assets and your beneficiary designations periodically, especially after a significant life changing event (such as the death of a spouse). You should make sure you have both a primary and a contingent beneficiary listed, obtain from the custodian of the asset or company the proper change of beneficiary forms, and complete those forms so the intended individual beneficiary or charity of your choice receives the funds.
Sometimes through no one’s fault the custodian or company where the asset is located cannot find the beneficiary designation form that a decedent’s relatives know has been completed. The custodian or company must place the burden of proof on the family members to present written evidence (that they no longer have) showing the policy or IRA is payable to someone other than the estate. In making changes to designated beneficiaries or verifying designated beneficiaries, during your lifetime, you should always insist on a written verification from the company or custodian that the designated beneficiary change you have requested has in fact been made. That written confirmation should be kept with your policy or other documentation showing the asset’s existence.
If you have other questions about the legal aspects of life insurance or IRA designations, please call any of our estate planning lawyers at 941-748-0100 and we will be glad to assist you. To contact Dana Carlson Gentry, Board Certified in Wills, Trusts and Estates, email her at dgentry@blalockwalters.com.
