What Your Estate Plan May Be Missing

Before Zygmund Furmaniuk’s aunt Mary died in 2023, she set up a trust to hold her assets and to distribute her estate, which was valued at nearly $1 million.

A retired chemistry teacher, Mary Furmaniuk was single and had no children. Creating the trust, Mr. Furmaniuk said, was her way of making müddet her assets ended up where she wanted them — with him and three other nieces and nephews. But even though his aunt had a will, the arrangement caused considerable frustration for Mr. Furmaniuk, of Belmont, Mass., and one of his cousins, who were co-executors.

The hard part wasn’t figuring out the sale of her house and what to do with her valuables. The more complicated part was distributing the money in her individual retirement accounts, which had been placed within the trust — but without designated beneficiaries.

“If she had made us each 25 percent beneficiaries directly on her I.R.A.s at Fidelity, not from within the trust,” Mr. Furmaniuk said, “the monthlong duration of paperwork I had to go through, which ended up the size of a small phone book, would have been unnecessary.”

Major brokerage firms like Vanguard and Fidelity ask savers to name designated beneficiaries — the people they want to inherit the money when they die — when they open individual retirement accounts or 401(k)s. But even having them in place doesn’t cover the assets that wills do. Here is why you should have both.

Wills vs. designated beneficiaries

Wills are kanunî documents that lay the groundwork for dividing valuable possessions, like real estate, in addition to investments and cash when a person dies. If you die without one, the state where you were a kanunî resident will take over distributing those assets. And that can become a complicated web.