Account Beneficiaries vs Will Beneficiaries: Which Document Wins?

Financial accounts, such as bank accounts, investment accounts, and retirement plans, often make up a significant portion of an individual's assets. As a result, account owners should understand how estate planning decisions can affect the distribution of these assets upon their passing.

When setting up a financial account, you are typically asked to designate one or more beneficiaries who will receive the account balance when you pass away. It's crucial to recognize that upon your death, the assets in these accounts will be distributed to the designated beneficiaries, regardless of the provisions in your last will and testament.

Your last will and testament controls the distribution of your "probate assets," which are generally assets owned individually in your name without designated beneficiaries. In contrast, financial accounts with named beneficiaries are considered "non-probate assets." Non-probate assets can be claimed by beneficiaries without court involvement or the need for an attorney.

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