Tennessee residents sometimes get confused and believe that whatever they say in their will must be followed by the probate court after they're gone. This, unfortunately, is not the case -- as many Tennessee families have discovered following the passing of a loved one.
If your will does not conform to estate planning laws, your will might not be valid, and your estate might not be distributed in the way that you've planned. This is especially evident when it comes to beneficiary designations on individual retirement accounts and 401(k) accounts.
Most financial accounts of this type, as well as insurance-related accounts, will have a beneficiary designation. The beneficiary designation is simple paperwork -- and it might be just a few lines -- that you must fill out when creating your account. It designates who the recipient of the contents of the account will be.
A lot of times, Tennessee residents will put the words "as per my will" in place of directly identifying a person who will benefit from the IRA or another account after you have died. They use "as per my will" to avoid confusion if their will or other plans change. Although writing "as per my will" could work in many cases, it can also create legal confusions and difficulties for your heirs.
One way that the "as per my will" designation is not appropriate is if you want your heirs to benefit from life expectancy options on a rolled-over IRA. The life expectancy option allows your heir to keep the assets inside the IRA, as they grow tax-deferred, and also regular distributions. The life expectancy option represents a considerable tax-saving advantage, but the option is only available to heirs whose names are correctly listed on the beneficiary designation of the IRA account.
Do you have questions about the beneficiary designations on your financial accounts? A qualified Tennessee estate planning lawyer can offer the legal knowledge and tools required to navigate your estate planning effectively, so that your wishes and intentions for your heirs will be followed after you're gone.
Source: Investopedia, "Mistakes In Designating A Retirement Beneficiary," Denise Appleby, accessed March 10, 2017