Most people think of a will when they picture an estate plan, but a will does not control everything you own. Certain assets pass directly to whoever you named as a beneficiary, completely outside of your will and the probate process. That means an outdated or incorrect designation can send your assets to the wrong person, no matter what your will says. In Louisiana, where estate law carries its own unique rules, keeping these designations current matters more than many people realize.
Common assets that carry beneficiary designations
Several types of assets allow you to name someone to receive them directly after you pass. Here are some of the most common:
- Life insurance policies: The payout goes directly to whoever you named, and your will has no say in where that money goes.
- Retirement accounts: IRAs, 401(k)s and similar accounts pass to your named beneficiary and often bypass probate entirely.
- Payable-on-death accounts: Bank accounts with a POD designation transfer directly to the named person when the account holder passes.
- Transfer-on-death accounts: Investment or brokerage accounts may carry similar designations, allowing those assets to pass outside of your estate.
Keeping these designations aligned with your overall estate plan helps ensure your assets actually go where you intend.
What can go wrong with outdated designations
Life changes quickly, and beneficiary designations do not update themselves. A divorce, a remarriage, the birth of a child or the death of a named beneficiary can all create serious problems. In Louisiana, community property rules add another layer of complexity, since your spouse may have an interest in certain assets that affects how designations interact with state law.
Naming a minor child without a proper structure in place can also cause complications, since minors generally cannot directly receive large sums without court involvement. Reviewing your designations regularly keeps your estate plan working the way you intended.
If your life circumstances have changed or you have not reviewed your beneficiary designations recently, our firm can help you make sure your assets go where you want them to. Contact us today to schedule a consultation.