The limits of your last will and testament

LIFE INSURANCE POLICIES As is the case with retirement accounts, a life insurance policy’s beneficiary listing, not your will, generally determines who gets the money. So again, you could

accidentally leave a policy payout to your ex. But both insurance and divorce are chiefly covered by state law, which can vary. (In contrast, private-sector retirement investments are

primarily governed by federal laws.) Some states — Minnesota, for example — automatically revoke the beneficiary designation of an ex-spouse on a life insurance policy. The rules can be

complicated, so the safest strategy is to update beneficiaries on all insurance policies and investments after a divorce. “You should not fall into the trap of trying to figure out which is

a state account and which is a federal account. Just update all of them,” Walny says. A divorce agreement, however, might include a provision that an ex-spouse receives life insurance

proceeds, notes Walny; in that instance, the policy­holder should affirm that election with the insurance company once the divorce is final. BANK ACCOUNTS If an account is titled as transfer

on death (TOD), payable on death (POD) or joint tenancy with right of survivorship (JTWROS), those designations generally override the will, says Reggie Fairchild, a South Carolina

financial planner. Your account’s signature card would indicate if any of these designations applies; you can ask your bank to look up your card if you aren’t sure. For individual accounts

titled TOD or POD, the beneficiary can go to the bank with proof of identity to transfer or collect the funds. JTWROS accounts become the property of the surviving account holder, who will

need to show the bank a death certificate for the other account holder. REAL ESTATE If two spouses own a home jointly with right of survivorship, the property automatically passes to the

remaining spouse without a court’s involvement. Real estate can also be transferred outside a will in certain states, such as Wisconsin, through a TOD deed, in which you name the beneficiary

on the property, Walny says. ​ TRUSTS ​ Any asset in a trust is not governed by a will, making trusts another tool for distributing assets outside of probate court, Wood says. But after a

trust is set up, you need to retitle accounts, change beneficiaries or take other measures so that each asset you want to put into the trust will actually end up there. Be aware that, under

the 2019 Secure Act, most trusts have lost the ability to stretch IRA distributions over many decades; now, in most cases, those distributions need to be paid out within 10 years, similar to

the case with nontrust IRAs, says Ed Slott, founder of IRAhelp.com. ​ GET RIGHT ON THE MONEY​ Follow these tips for naming beneficiaries to help asset transfers go more smoothly. ​ FILL OUT

FORMS COMPLETELY. When listing beneficiaries, include full names, Social Security numbers and relationships to you. If you have multiple beneficiaries, specify the percentage split of your

assets and make sure numbers total 100 percent. USE WORDS PRECISELY. Money goes to a primary beneficiary or beneficiaries. Only if there are no surviving primary beneficiaries do contingent

beneficiaries receive funds. Don’t make the mistake of listing one child as primary and another as contingent.​ STAY CURRENT. Life events such as marriage, divorce, the birth of a child or

the death of a beneficiary are good reasons to review ​your paperwork. Fairchild suggests checking annually, perhaps after you’ve filed your tax return.​ TAKE CARE WITH YOUR ESTATE. Naming

it as a beneficiary instead of a person or a trust (if you have one) may create unnecessary expense and hassle. ​Don’t wing it. Got a complicated financial or familial situation? Uncertain

about any of the rules? Then work with an attorney. A little money spent up front can save a lot of anger and anguish after you’re gone. You Need to Know These Estate Planning Terms