Beneficiary Designations.

Having properly designated beneficiaries is a crucial component of estate planning.

Many financial products (for example, life insurance policies, bank accounts, retirement accounts, savings bonds and annuities) allow you to designate a payable on death beneficiary,which, in most instances, will avoid probate of that particular asset upon your death. This passing to your designated beneficiary after death is called a nonprobate transfer.

It is a good idea to review at least annually your beneficiary designations for your financial accounts and ensure that they are in line with your estate plan. Be sure to also tell your estate planning attorney what financial products you have and who you have designated as your beneficiary as it becomes an important component of your estate plan. There can be unintended consequences for making certain beneficiary designations in certain financial products.

Also, if you are divorced and have named your former spouse as as beneficiary, California Probate Code Section 5600 states that any beneficiary designation involving a former spouse made before or during the marriage may be subject to automatic revocation to that former spouse once the divorce is finalized. There are exceptions. If you wish to leave a certain asset to your former spouse, you will need to make this clear after the date of dissolution. Don't rely on this code provision after a divorce -- review all your beneficiary designations and update them especially after a divorce or death in your family.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.