Is a beneficiary designation more important than a will?


Q. Let’s say a brother has a will naming his other brother and sister, but his bank account is payable upon death to just to the brother, not the sister. Is the bank account part of the estate? What happens with this account?
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A. We’re glad you asked. It’s important to understand how assets will be distributed so you can make a change if needed.

A beneficiary designation on a particular asset overrides a will provision, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

So, the beneficiary designation on the bank account directly naming the brother, payable upon death, overrides the will that names the brother and sister as the beneficiaries of the estate, she said.

The account will pass solely to the brother, she said.

“In either case, for purposes of the New Jersey transfer inheritance tax, the funds in the account will be considered part of the taxable estate passing to a sibling, which is subject to the inheritance tax to the extent the total funds — including the account and assets under the will — exceed $25,000,” Romania said.

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This story was originally published on August 14, 2020. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.