No one likes to think about dying, but Michigan residents can make the days following their death easier on family members by making sure all documents are up to date. This includes not only wills but also beneficiary designations on insurance policies and retirement accounts.
It is important to make sure these documents are up to date if a person has divorced and remarried. Employer-sponsored plans, such as insurance policies and retirement accounts, may still show the previous spouse. If a person remarries, and then dies without changing beneficiaries, the former spouse will collect the benefits, even though the deceased may have intended them for the current spouse. Forgetting to change documents like these is one thing people are likely to do after experiencing major changes in life.
Besides divorce and remarriages, other reasons for people to update their beneficiaries include the death of a spouse or primary beneficiary, a change in jobs with a rolled-over employer-sponsored retirement account, a child or grandchild added to the family, or a beneficiary becoming disabled requiring a change so it doesn't interfere with the person's disability benefits. Estate planners say February is a good time to make changes in beneficiaries because tax documents for the previous year have just been distributed listing appropriate contact information.
Proper estate planning can make things easier for the surviving family members, yet outdated documents can destroy a testator's intent. An estate planning attorney may be able to help a client conduct a periodic review and appropriate revision of wills and other agreements, which may make the eventual estate administration process easier on the surviving family members.
Source: Forbes, "The Big Estate-Planning Goof You May Be Making", Harper Willis, December 16, 2013