Which is more important: your list of beneficiaries on file with the banks that oversee your retirement plans or the recipients for those accounts that are listed in your will?

You may not realize that the named beneficiaries for your Florida IRAs, life insurance policies, bank accounts and even 529 savings plans will supersede any provisions you include in your will. If your will is up-to-date, for example, but the account paperwork is not, all of your account holdings will be transferred to the person named in the most recent set of forms. For many, that could be an ex-spouse or other outdated party. To ensure proper estate planning and asset distribution, it is critical that all of your account paperwork agrees with your formal will documents.

Even the best-structured estate plan is vulnerable to probate if beneficiary designations are not updated. Your spouse, life and general wishes for your estate may have changed in recent years; be sure that your beneficiary designations reflect those changes. Financial advisers encourage asset holders to name secondary beneficiaries, who will receive the contents of any account if the primary beneficiary dies before the estate is executed. Inconsistencies between your will and account documents make your estate planning documents vulnerable to probate, an expensive and time-consuming process.

Further, retirement and other accounts’ beneficiary status can have serious tax implications. Those who receive money contained in an account through a will may be required to withdraw it all at once, forcing them to pay exorbitant tax fees. A beneficiary designation will allow the heirs to withdraw the money a little at a time, reducing the tax burden.

Experts say that account holders should change their beneficiary designations when they get divorced or married. Other opportunities include the death or disability of your primary beneficiary or even the change of a job. Other family changes such as the birth of a child or grandchild may also spark a beneficiary change.

Individuals who are working to create a comprehensive wealth preservation plan may benefit from the qualified assistance of a probate attorney. These professionals can help you structure your estate plan so that the right people get the right amount of money. Consulting a qualified lawyer can make the execution of your estate much easier for your friends and family after you pass.

Luis E. Barreto