There is a trend among individuals to circumvent engaging an attorney to assist with their estate plans by simply naming death beneficaries on their financial accounts. Individuals believe that naming a beneficiary on an account is a simple, straightforward task, and that it requires no discussion with an attorney.

The problem is that naming death beneficiaries without first consulting an attorney can undermine an existing estate plan, which in some cases can have disasterous consequences. Consulting with an attorney is the best course of action in order to protect your estate plan.

Here are several issues to consider:

Beneficiary designations take precedence. When you designate a beneficiary on an account, that designation will take precedence over any estate planning document, like a last will and testament or a trust.

For example, say your estate plan distributes everything to your children “in trust” to protect your children’s inheritance from their spouses, for health reasons, or due to a child’s poor money management skills, etc.

If you name your children as death beneficiaries on your brokerage or bank account, all of those provisions that were set up to protect your children cannot be enforced upon them if they inherit via the death beneficiary designation. You have effectively undermined your own estate plan.

“My agent needs access to the funds.” One reason individuals name a death beneficiary is the idea that it will give the beneficiary access to pay bills and expenses of the individual. However, when you name a beneficiary on an account, there is no legal requirement the funds have to be used to pay your debts and expenses.

Whereas, when a person named in an estate planning document is acting as the personal representative or a successor trustee, the document specifically states that assets of the estate can be used to pay debts and expenses of the estate. This ensures proper administration of your estate.

Cash. Some people like to leave cash bequests to various relatives, charities or other people. When you name beneficiaries on accounts, those accounts are not beholden to the provisions of your estate planning documents, and therefore you could be leaving your estate with insufficient funds to pay those bequests.

Improperly named beneficiaries. Unless you consult with an attorney, you should not name your trust as a beneficiary on an IRA or other types of qualified retirement accounts. Trusts that receive such qualified money need to contain special provisions for tax purposes.

Failure to plan for contingencies. There is always a risk a designated beneficiary could predecease you. For example, in your estate planning documents, you can designate that everything goes to your children, and if a child predeceases, said child’s share shall go to his or her children.

However, if you put your children as death beneficiaries on an account, and one of your children predeceases you, depending on the designation form, the deceased child’s children might be excluded and only the named surviving children would share the account.

These are but a few issues to consider before designating beneficiaries on accounts. It is not a straightforward and simple task as many believe and should not be undertaken without consultation with an attorney.

Rebekah Thompson is an associate attorney with Elder Law & Estate Planning Center. hiltonheadelderlaw.com