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Integrating beneficiaries into an estate planning approach

Some New Jersey residents are unaware that simply having a will in place does not provide comprehensive estate planning coverage. Accounts that have designated beneficiaries fall outside the scope of a will, and the provisions laid out within those account documents will supercede those within a last will and testament. Understanding the power of beneficiary designations can give individuals a degree of flexibility when it comes to estate planning.

The first step in integrating beneficiary accounts into one's estate planning package involves coordination between all trusted advisors. Individuals working with an estate planning attorney and one or more financial advisors should give those individuals the authorization to communicate with each other. It is difficult to create a comprehensive plan when advisors have different visions of the best possible outcome.

The best way to coordinate a new plan is to review all existing assets and determine where those assets should be distributed. From that point forward, individuals may choose a number of estate planning options, including the creation of one or more trusts with the trust being named as the beneficiary of various accounts. Another option is to work out a plan in which certain individuals receive assets through one's will, while others inherit directly as a beneficiary.

Once a working plan has been created, it is important to periodically review those plans to determine if they still fit an individual's needs. It is especially important to consider the overall estate planning package whenever new assets are acquired that ask for a beneficiary designation. This can avoid an imbalance in the eventual distribution of assets, which is an end result that few New Jersey residents intend.

Source: Forbes, "Your Will And Trusts Aren't Enough: Using Beneficiary Designations As An Estate Plan", Jamie Hopkins, June 2, 2015

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