There are several steps that Maryland residents must to take to ensure that they have a solid estate plan. They must tend to their estate administration, choose an executor and have documents drawn up that will communicate their wishes. They must also strive not to forget important factors, such as to change their beneficiaries when necessary.
Beneficiaries are designated on a variety of accounts, including bank accounts, retirement accounts, company pensions, college savings plans, life insurance policies and brokerage accounts. Designating a beneficiary is critical to ensure that one's wishes are carried out. In most cases, the beneficiary designation will override a contradictory term in a will.
Not changing the beneficiary can lead to catastrophic results. In one case, a man intended not to give his ex-wife anything else after their divorce. However, he neglected to change the beneficiary designation for his pension benefits and his life insurance policy. He died two months after the divorce in a car accident. Rather than his children from a previous marriage getting the benefits, the ex-wife got them since the court ruled that designations of beneficiaries usurped state law that would have caused the ex to be automatically disinherited. In a similar case, another ex-wife had waived interest in her ex-husband's company savings and investment plan as part of the divorce agreement. The husband was required to submit a form to change beneficiaries, but he never did so. The man died seven years later. Even though the court found that the beneficiary designation was outdated, it stood up in court and the ex-wife received $400,000 and the man's daughter was left with nothing.
Maryland estate planning lawyers may be able to assist individuals in preparing estate plans. They may also assist in the estate administration process.