Don't let your bank accounts and insurance policies frustrate your estate plan!

In one Arkansas case a man signed a will providing that his wife and each of his children from an earlier marriage were to receive equal parts of his estate. The same day he designated his wife as the primary beneficiary for his group life insurance and his three children as alternate beneficiaries.

The man died leaving $42,000 in benefits from the life insurance, and little else. The children claimed that each of them and the wife should receive 25% of the life insurance money. The wife claimed that all the life insurance money was hers. The Arkansas Court of Appeals ruled in her favor. The children received nothing.

It seems clear that the man really wanted his wife and children to share equally in all of his estate. His goal was not accomplished. He apparently had not obtained good advice on the effect which the insurance policy would have on his estate.

The same problems can arise in Arkansas with bank accounts, mutual funds, stock,land and other investments held in joint names. In many cases the person whose name is on the investment with yours becomes the sole owner upon your death. This is true in spite of what your will says, and in spite of the fact that you only put that person's name on the account so he or she could help you with it while you were alive.

A common practice involves parents deeding their real estate to their children.While a deed might achieve the desired goal, it is often done without first asking important questions (e.g. What if one of my children has financial problems, or a divorce? What if I have to go into a nursing home? What if I change my mind later?).

In many cases taking such steps can help to achieve your goals. However, you want to be fully informed. Consult with a competent attorney to be sure that what you are doing is consistent with your overall estate plan.

If you live in Arkansas, we would be glad to assist you. For an appointment, please call 479-968-4747 (Russellville area) or 888-295-4741 (state-wide toll-free). If you live at a distance, an appointment by telephone can be arranged.

Copyright (c) 2011, Jim Carfagno, Jr., P.A. All rights reserved