Full question:
I bought a Mutual Will for Married Couple with Minor Children. In that Will there is no mention about Life Insurance , CD's or retirement funds. The Section E of the Will says ..'...I direct that my Trustee administer hereunder any funds coming into the hands of my Beneficiaries pursuant to any life insurance policy insuring my life' . ...My questions is:Is it better if I change that sentence to the following statement: ' I direct that my Trustee administer hereunder any funds coming into the hands of my Beneficiaries pursuant to any Life insurance policy insuring my life and any funds coming into the hands of my beneficiaries from any POD accounts, CD's and any retirement funds'. ...or if I name The Trust as beneficiary on Life insurance, CD's and retirement funds?Thank you!!
- Category: Wills and Estates
- Date:
- State: Massachusetts
Answer:
When it comes to life insurance, CDs, and retirement funds, you have a couple of options. If you name your trust as the beneficiary of these assets, they will pass directly to the trust without going through probate. This means you don’t have to re-register these assets in the trust's name; you simply designate the trust as the beneficiary. This is often the preferred method because it ensures that the assets are managed according to the terms of the trust after your death.
On the other hand, if you modify your will to include a directive about life insurance and other assets, it may not have the same effect. Assets like life insurance policies and retirement accounts typically pass outside of probate to the named beneficiary, regardless of what your will states. Therefore, it’s generally more effective to name the trust as the beneficiary of these assets directly.
Keep in mind that if you name someone else (like a spouse) as the beneficiary of your life insurance policy, that policy will go to them first, potentially complicating matters if both of you pass away simultaneously. In such cases, the proceeds may go through probate before reaching your children.
In summary, naming the trust as the beneficiary of your life insurance, CDs, and retirement accounts is usually the better choice to ensure those assets are distributed according to your wishes without probate delays.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.