As you have already learned from previous questions, it is very important that you review your insurance policies, bank, brokerage and retirement accounts, and other "non-probate" property to ensure you know who will receive the benefits of these upon your death. It doesn't matter if you have a Will that directs some other result for these assets. These will simply never find their way into the probate process and the Will has no effect on their disposition.
Many people simply "forget" about their beneficiary accounts when they prepare an estate plan and do not factor these accounts into the plan. This often has unfortunate results when the heirs named in the Will learn that some of the estate's most significant assets will not pass as the estate plan inten
ded. This is particularly problematic if the assets of the estate were to be held in a trust for a spouse or minor beneficiaries.
Favorable tax rules for retirement accounts should also be taken into account in your estate planning. For tax reasons you may want to keep your retirement accounts out of your probate assets, but you should examine your alternatives as part of a comprehensive review of your financial readiness planning.
A side note: life insurance policies payable to a former spouse as a beneficiary will be voided as a matter of law and will instead be payable to the secondary beneficiary (or estate). This only applies to cases of divorce, not legal separation. It also does not apply to Servicemembers Group Life Insurance (SGLI) which will, in fact, pay its policy benefits to former spouses under Federal law.
The bottom line: You should take the time to review all of your life insurance policies, as well as bank, brokerage, and retirement accounts to ensure that you know who will benefit from these assets upon your death. There is a very high potential for unintended consequences with assets that have their own beneficiary designations. Your actions now can save your loved ones from additional stress and anxiety later.
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