There is one simple estate planning tool you can accomplish immediately and without having to call a lawyer-updating your beneficiary designations.

Many assets, including bank, brokerage, retirement, company benefit plan, life insurance, and 529 college accounts are passed at death via a beneficiary designation. It’s easy to name the beneficiary by completing the proper form provided by the financial institution. It’s also easy to forget to turn the form in or to make sure the beneficiary you designated when the asset was acquired is still your intended beneficiary. In most cases, the beneficiary form will overrule your will, trust, and even state law so it is important to make a periodic review of your designated beneficiaries.

The Supreme Court has faced this issue on at least two occasions. In 2001, the court ruled that a decedent’s ex-wife was the legal beneficiary of his pension benefits and life insurance proceeds because the decedent failed to update the beneficiary designations after their divorce. The Court ruled that the beneficiary designations overruled the state law that would have automatically disinherited the ex-wife and so the decedent’s children from a prior marriage received nothing. Egelhoff v. Egelhoff, 532 US 141 (2001). In another matter, the Court determined that the beneficiary designation overruled the divorce agreement in which the ex-wife waived her rights to her ex-husband’s company savings and investment plan and the ex-wife inherited $400,000 from the decedent-seven years after their divorce was final. Kennedy Estate v. Plan Administrator for the DuPont Saving and Investment Plan 129 S.Ct. 865 (2009).

Many circumstances, in addition to a divorce, will necessitate a review of your beneficiary designations such as the birth or death of family members, the actual financial needs of your family members, or a new marriage. Based on Supreme Court rulings, you may not be able to rely on your updated will or trust to distribute those assets with beneficiary designations. As a general rule, whoever is named on the most-recent beneficiary designation form (no matter how old that form may be) will remain the beneficiary unless and until it is changed.

Naming beneficiaries where appropriate also allows the avoidance of a probate action for those assets since such assets go directly to the named beneficiaries. If you name your estate or leave the beneficiary designation blank, the asset will be required to go through a potentially costly and time-consuming probate action before the asset will be distributed to your heirs at law (which may not be the same people you would like to receive the asset).

To check your beneficiary designations, contact the financial institution managing the asset. If what is on record does not match your intentions, request a new beneficiary designation form and update your beneficiaries immediately. A periodic review will insure that your beneficiary designations continue to match your intentions. And if you are making updates to your will and trust, include an update of your beneficiary designations as well.