When planning your estate in New Jersey, it’s important to consider both your will and beneficiary designations on various assets. These two methods are important for determining who will inherit your property after your death. But what happens when a will specifies one person to receive an asset, but its designation form names someone else? This situation can lead to confusion and disputes when your estate is being distributed. Understanding when and how beneficiary designations can override your will is important in ensuring that your estate will be handled as you intended. Continue reading for more information and work with a knowledgeable Sussex County estate lawyer to secure the help of a skilled legal professional today.
What Does a Will Do?
A will is a legal document that outlines your wishes for the distribution of your assets after your death. In New Jersey, a valid will must be signed by the testator (the person creating the will) and witnessed by two people.
The primary function of a will is to name an executor who will be responsible for managing your estate and ensuring your debts are paid. It directs how probate assets will be divided among your chosen heirs or beneficiaries. Creating a will is essential for controlling how your assets are handled and providing clarity for your loved ones.
What Are Beneficiary Designations and How Do They Work?
A beneficiary designation is a form naming who receives an asset after your death. It essentially functions like an automatic transfer, granting the named beneficiary access and ownership of the property once they can procure a death certificate.
Beneficiary designations are specific instructions attached directly to certain financial accounts or policies, like life insurance, 401(k)s, IRAs, and payable-on-death (POD) accounts. Because these designations are contractual agreements with the institution holding the asset, they allow the property to bypass the probate process, usually resulting in a quicker transfer of ownership.
Can Beneficiary Designations Override a Will in NJ?
Yes, in most cases, assets with valid beneficiary designations take precedence over the will and are not controlled by its terms. Financial institutions are legally obligated to distribute assets directly to the named beneficiary or beneficiaries. This applies even if the will states something different.
Courts rarely overturn valid beneficiary designations, so the named recipient will generally be transferred ownership of the asset regardless of what the will says. There are very limited exceptions, such as evidence of fraud, undue influence, or improper execution.
To minimize disputes and ensure your assets are handled as you intended, it’s important to review your documents to ensure that your will and beneficiary designations are aligned. Consulting with an experienced estate lawyer can help you navigate these complex rules and avoid potential conflicts among your beneficiaries. Reach out to a skilled legal professional for guidance today.
