Estate Planning Considerations for Blended Families in Washington – Part III

In Part I of this series, I discussed why blended families face unique estate planning challenges, particularly under Washington’s community property laws.  In Part II, I explored practical strategies to help protect both a surviving spouse and children from prior relationships, such as appointing a professional fiduciary to administer the estate.  In this final installment, I focus on one of the most commonly overlooked estate planning issues for blended families: outdated beneficiary designations.

Many assets pass according to a beneficiary designation rather than the terms of a Will.  Common examples include life insurance policies, retirement plans, and payable-on-death bank accounts, including savings and checking accounts.  These assets are generally considered “non-probate” assets, meaning they pass directly to the named beneficiary outside of probate.  In contrast, “probate” assets are distributed according to the terms of a person’s Will as part of the probate process.

This distinction is important because beneficiary designations usually control the distribution of a non-probate asset even if a person’s Will says otherwise.  However, the law in this area can be complex.  The type of account, Washington statutes, federal law, and case precedent may affect whether a beneficiary designation remains effective after certain life events, like divorce.  When disputes arise, determining who is entitled to a non-probate asset can become complicated and expensive.

For blended families specifically, outdated beneficiary designations can lead to significant conflict among surviving spouses, former spouses, and children from prior relationships.  Understanding the difference between probate and non-probate assets – and regularly reviewing your beneficiary designations after major life events such as marriage, divorce, or remarriage – is a critical part of effective estate planning.

If you would like to learn more about properly designating beneficiaries for non-probate assets and how those designations impact your overall estate plan, our law firm is here to help.