You Can Contest a Will … But Did You Know That You Can Contest Beneficiary Designations?

By Daniel A. Perry, Esq.

There are many people (although, certainly not enough people) who take the time to plan their estates and engage in basic legal life planning. However, if you use the wrong strategy you can end up in court for years and years costing tens, if not, hundreds of thousands of dollars.

Many people have heard cases where a Will is contested by a family member who was written out of the will. A will can be contested for a number of reasons including:

  • Will Executed Improperly
  • Duress
  • Undue Influence
  • Lack of Capacity

However, did you know that just as a will can be contested, that beneficiary designations can be contested as well?

Financial Accounts & Beneficiaries

As you may know, there are certain financial accounts where you can name a proper beneficiary. So long as these beneficiary designations are completed properly (subject to certain limitations) these assets transfer at the moment of death outside of a probate administration. These types of assets may include Annuities, Life Insurance, 401(k)s, IRAs, and Money Market Accounts just to name a few.

Many people have even been told or heard that you can name beneficiaries on these accounts as your exclusive and sole estate planning strategy to avoid probate.

However, a disgruntled heir who was removed as beneficiary on an account or removed from the will as a beneficiary is allowed to contest the beneficiary designation just as he or she can contest the Will. In addition, the same grounds apply to beneficiary designations.

An Example: John, Jane, Joe and Brad

John and Jane had a Will leaving everything to their only child, Joe. In addition, John and Jane had a number of financial accounts naming their only child Joe as the sole beneficiary. A number of years after John had passed away, Jane became close with her nephew Brad. A few weeks before her death, she mentioned that she was going to change her will to leave Brad some money when she died. Unfortunately, Jane never got around to it. When Jane died, Brad was surprised to learn that he did not receive any money as promised from Jane’s estate. Brad filed a number of legal actions against the estate. First, contesting the validity of the Will leaving everything to Joe. In addition, Brad filed a legal action contesting the validity of the beneficiary designations. During this time period of the case, all financial accounts were frozen and forbidden from being distributed at the moment of death to Joe, as well as all the assets in Jane’s individual name passing to Joe via her will. This case needed to be completely litigated to its conclusion (including any appeals that may be filed) before any of the assets would be able to pass to Joe … including those beneficiary designated accounts!

You see, just because you name beneficiaries on your financial accounts, does not mean that you are covered. Estate planning is not beneficiary designations, your beneficiary designations are merely a part of your estate planning.

For More Information

With all these issues and potential problems that you could be leaving behind for your family, why would you leave planning your estate to chance or taking inappropriate advice?

If you have questions about the estate planning and the proper legal protections for your family, please contact our office at (513) 241-0400 or use the contact form available on this website to schedule a time to speak with one of our Estate Planning Attorneys. We look forward to hearing from you!