Should I List Accounts with Beneficiary Designations in My Will?
I have investments with Edward Jones on which the beneficiaries have already been named. Do these have to be listed in my will or trust?
No, your beneficiary designations supersede your will. By naming beneficiaries to the Edward Jones investments, they will pass outside of probate and will not be included under the terms of your will. In fact, wills rarely refer to specific accounts since they can always change between the time the will is written and the individual passes away.
What can get confusing sometimes is when the will or trust and the beneficiary designations are inconsistent. The will may say your estate goes to Jean and Bob, but the beneficiary designations might have some of your accounts going to Jill. They may wonder what you really had in mind. Did you want everything exactly this way? Or had you changed your mind, never getting back to your attorney to update your will after you decided your estate should go to Jill? The other potential problem with inconsistent designations is what happens when you change your accounts over time, so the account that’s going to Bob gets smaller while the one going to Jill gets bigger. This can especially lead to disputes if this happens late in life when one account or another gets spent down on your care or your agent under a durable power of attorney is making these decisions rather than you. It could even be a bigger problem if Bob or Jill is that agent and decides to spend down the other’s account.
These are reasons I often prefer revocable trusts. They can be used to avoid probate just like beneficiary designations on accounts and can distribute your estate as you wish no matter what happens to the values of your various investments. Of course, this is less important if all the beneficiaries’ interests are the same on all accounts.