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Remember that beneficiary designations may conflict with a will

Your will is your last way to ensure that your wishes for your property are carried out. Many people assume it is literally the last word, that everything in the will stands.

However, the reality is that many beneficiary designations are actually going to take precedence over a will. If the two are in conflict, the designation is honored and the will is not, even if you wrote the will years later.

For instance, one woman was terminally ill when she wrote her will. She had two children from her first marriage, along with a husband from her second marriage. She just wanted to split things up evenly, giving a third to each.

It sounds very simple and easy, but after she passed away, they found out that she had never updated her retirement account. The beneficiary designation still said that 100 percent belonged to her husband, and that's how the money was distributed. It did not go to her kids.

Fortunately for the kids, the husband read the will and opted to go along with it. They set up another account and he paid the children -- and the taxes -- out of it.

The problem is that this was a legal hassle and he had to make small distributions for years on end. It could have been done much more cleanly beforehand. Plus, if he had not wanted to honor his late-wife's real desires, he wasn't legally obligated to do so. The kids may have lost a lot.

Keep this in mind when look into your estate planning options. Make sure you know what steps to take and how all of your documents really work together.

Source: The Balance, "Why Beneficiary Designations Override Your Will," Dana Anspach, accessed April 20, 2018

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