A lot of people in Georgia think that a last will and testament is the single most important piece of an estate plan. While a will is very important, there are other documents that are just as crucial. People should give special attention to the beneficiary designations on their financial accounts because these designations can overrule what is written in a will.

Though beneficiary designations are sometimes overlooked, forgetting to update them throughout a lifetime can have serious consequences. For example, a person could accidentally leave the proceeds from a life insurance policy or retirement plan to an ex-spouse or a deceased family member. As long as beneficiary designations are up-to-date, assets can be passed quickly and directly without going through probate.

While choosing beneficiaries for financial accounts, a person may want to think about the tax consequences. Unless the beneficiary is a spouse, an inherited IRA will have tax consequences that could create a financial burden and estate planning headache for the beneficiary. If people do not have someone to name as a beneficiary, they can always write the name of their favorite charity on the beneficiary designation form.

An estate planning attorney can help clients to update all of their beneficiary designations during a regular review of their estate plan. It is recommended that such a review be conducted annually. There are other types of documents that could be suggested by an attorney, depending upon a particular client’s family circumstances. For example, a special needs trust could be set up for a mentally- or physically challenged loved one in a manner that would not jeopardize the eligibility for certain government benefits.