It is important to know the disposition of assets upon the death of a financial account holder. In New Jersey, the Multiple Party Deposit Account Act applies to accounts at banks, and the payable-on-death determination takes precedent over the terms in a will. If there is a surviving party on the account title, he or she becomes the only owner of the amounts in the account.
Accounts that have a beneficiary designation are called non-probate assets. If they do not have beneficiaries named, the assets will be distributed according to the terms in the will. If there is no will, the laws of intestacy are put into place.
The terms of a will are used to distribute other assets that do not have designated beneficiaries. If a change is desired in beneficiaries, each non-probate account will have to be updated. A statement in a will does not have the desired overriding result that the asset owner may wish. An alternative is to remove all beneficiary designations in all accounts and let the provisions established in a will apply to them.
An individual may want to consider the beneficiaries that have been named in financial accounts. As children and grandchildren are born, people divorce and others die, an attorney knowledgeable in estate planning may answer questions that the family may have. An attorney may also recommend the estate-planning documents that the individual may want to consider for his or her situation and establish periodic reviews to make sure that the documents stay current with events in the individual’s life.
Source: NJ.com, “Biz Brain: Beneficiaries, wills and inheritances“, Karin Price Mueller, October 23, 2013