A beneficiary is a person or entity you choose to inherit your assets after your death. Beneficiary designation can be tricky when it comes to estate planning if done incorrectly. If one fails to review and coordinate the assets, it could result in conflicts in distributions according to your Will. Here are some things to consider when choosing the beneficiary of your assets.
Although they are usually the candidates for beneficiaries, these are not always bound to close-knit relatives. Generally, you can designate one or two people to receive your assets. They can also be in the form of organizations like a nonprofit or charity and even your estate.
You can also assign a trustee to receive your assets. A trustee is a person or a firm that holds property for the benefit of a third party. Trustees can control and distribute assets according to the trust deed.
If you plan to have your children as your next beneficiary, it is best to double-check on state regulations to avoid conflicts that may arise. State regulations may limit if or how much a minor can receive from the assets. To avoid this, consider setting up a trust or designating an adult to supervise the distribution to the minor. The minor will only directly receive the asset once they’ve reached 18 years old.
Primary beneficiaries are the ones you selected to receive the assets upon your death. However, there can be instances where the primary cannot be located or refuses the proceeds. It’s a good idea to have a secondary, or contingent beneficiary as well. That way, the distribution can still proceed.
You can opt to disinherit someone from your immediate family as well. Although you can just leave them out of the Will, it’s sometimes not sufficient enough. You must acknowledge them first in writing and then state that you’re not making any provisions to make them a beneficiary. That way it would be clear that they won’t be receiving any distributions from your estate. You can also just leave them a small amount of money so that it would be clear that they’re not left out in the Will.
These are some key tips on designating a beneficiary. If you have any questions regarding estate planning, contact our estate planning lawyer at Beth Hunt Attorney At Law. We have helped our satisfied clients meet their goals. Call us at 719-577-4800.
