Beneficiary designations can be an important part of an estate plan for people in Washington, but they are often mishandled. Retirement accounts, annuities and life insurance are among the assets that are passed using a beneficiary designation.
One common error is not naming a beneficiary at all. What happens to the asset at that point depends on the type of asset and the rules of the financial organization. The asset might go directly to the probate estate, which could cause delays and incur tax. Some people who do complete beneficiary forms fail to do so clearly. For example, if two family members have the same name, such as a senior and a junior, the form needs to clarify who the asset should pass to. This type of error could also lead to a delay or even litigation.