Creating an estate plan in New York involves preparing a number of different documents. These papers may include a Last Will or Living Trust. There may also be other documents associated with a person’s assets such as bank accounts, life insurance policies and retirement funds like Individual Retirement Accounts and 401K plans.
In all instances, it is very important to take care to properly name the beneficiaries on the documents. In this regard there are various rules and requirements and procedures that need to be adhered to so that the beneficiary is properly designated. For example, in a Last Will, when a person is named as a beneficiary of a bequest, the person’s name should be clear and correct. Also, it is a good practice to provide for an alternate beneficiary in the event the primary beneficiary predeceases the testator.With regard to other assets such as life insurance and retirement accounts, the companies or institutions that issue or maintain these assets typically have particular forms and procedures for the naming of primary beneficiaries and alternate beneficiaries. Problems often arise when these forms or procedures are not accurately or fully followed or completed. This was the situation recently presented in a Manhattan Estate matter decided by Manhattan Surrogate Rita Mella on April 11, 2018 in a case entitled Estate of Durcan.
In Durcan, the decedent had originally created Individual Retirement Accounts that were held by the securities firm of Merrill Lynch. At that time the decedent had named her sister, Mary Anne Cunney, as designated beneficiary. Thereafter, when the decedent’s investment advisor transferred his employment from Merrill Lynch to Morgan Stanley, the decedent decided to transfer her IRA accounts to Morgan Stanley as well. Unfortunately, the decedent, although in the process of attempting to transfer the accounts, did not fully complete and deliver to Morgan Stanley the new Morgan Stanley beneficiary forms naming her sister, Cunney, as the sole beneficiary. When the decedent died, since the procedures for fully completing the beneficiary forms were incomplete, the Court ruled that the IRA accounts were payable to the decedent’s estate rather than solely to Cunney.
As can be seen from the Durcan case, it is very important to make sure that all of the proper documents are completed and delivered regarding beneficiary designations. Whether you are preparing a Will or a Trust or designating beneficiaries of life insurance or retirement accounts, the selection and input of beneficiary information and the completion of all procedures is essential.
I have assisted clients with beneficiary designations in connection with their estate plans and also with regard to Estate Litigation. Call me now for a free review if you have a question regarding a beneficiary designation or an estate problem. New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate, estate settlement and real estate cases throughout New York City including Manhattan and Brooklyn. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.