Michelle Fine Esq.

Michelle Fine Esq. Elder Law & Estate Planning Attorney
Wills, Estates and Elder Law serving
Northern NJ and NY

The Importance of Beneficiary Designations....Estate planning in our day and age is complex and usually involves many di...
02/01/2024

The Importance of Beneficiary Designations....

Estate planning in our day and age is complex and usually involves many different elements. While many people know that almost everyone needs “the big three” documents – will, power of attorney, and health care proxy – the beneficiary designation issue has not received the attention it deserves.

What is a Beneficiary Designation?

Some assets you may hold, such as a bank account, 401k, or life insurance policy, allow the holder to designate a beneficiary for the account to inherit the account without going through probate. The beneficiary would receive the asset without the need for a will or the completion of probate and estate administration.

Why Is This Important?

There are many ways for this process to fail.

First, the assets for which a beneficiary designation is most important are pre-tax assets such as a 401k. This is because failure to name a beneficiary means the asset is distributed through the will, which can result in negative income tax results for the recipient. In other words, the beneficiary would have to pay more in tax than they would have if they were simply the named beneficiary.

For many people these days, a significant amount of their wealth is held as 401k or IRA accounts. It is crucial to pass these through to your heirs correctly to avoid extra tax.

Second, it is important to keep these forms up to date so that they accurately reflect your wishes. It is common to forget about an old 401k from a previous employer and neglect to update the form, resulting in the distribution of the funds to someone you did not intend.

Third, other financial assets can also have beneficiary designations, that do not necessarily affect the tax. However, the named beneficiary on the form takes precedence over the beneficiaries named in the will. Coordinating the beneficiary designees and your probate estate, reflected in the will, can be especially important if different assets are supposed to go to different beneficiaries for different reasons.

My Office Can Help

Feel free to contact the Law Office of Michelle Fine for assistance in this crucial area of estate planning.

Call us today to make an appointment at (201) 773-8914.

06/20/2023

Hi, I am Michelle Fine. I have been an attorney at law for almost 30 years, advising individuals, families, businesses and government entities on complex legal matters that have real world impact. For the past fifteen years, her practice has focused on helping senior citizens, veterans, and small business owners and their families plan for the future while dealing with the challenges of today. She has guided families on the legal journey from preparing wills and powers of attorney to guardianships, fiduciary relationships, probate, estate administration and other matters. Her approach to client work is high touch, low tech. Her caring attitude and hands-on case management helps get positive results.

Michelle Fine received a Bachelor of Arts from Barnard College, Columbia University and her juris doctor from Brooklyn Law School. She is admitted to the bar in both New York and New Jersey.

Why It Is a Good Idea to Have a Will?A will is a document that states who inherits your property when you die. Drafting ...
06/20/2023

Why It Is a Good Idea to Have a Will?

A will is a document that states who inherits your property when you die. Drafting and executing a last will and testament gives you the opportunity to dispose of your property at death. Preparing your will can give you the opportunity to do some other essential planning, as well.

For many reasons, people often put off this important task. No one wants to contemplate the end of life. However, there are many advantages to having a will, including:.

Avoid having someone else decide who gets your property. With a will, you get to decide who inherits your property. If you die without a will, the state decides in accordance with the law intestacy. Your property may notnecessarily be distributed according to your wishes.

Being prepared and organized. The process of preparing a will requires you to think about your assets and organize your affairs so that information I available to loved ones when the time comes. It also allows you an opportunity to discuss inheritance with your loved ones to reduce tensions and allow smoother family relationships.

If you have minor children, you can appoint a guardian for them and someone to look after property you have left for them. In the absence of the appointment of a guardian, a judge may decide who will be the guardian to your minor children.
Having a will can help you achieve the most important goal of all – peace of mind.

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Fair Lawn, NJ
07410

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