There are a variety of reasons you need to name a beneficiary of your estate. The most important is so that in the event of your death, your possessions and money go to the people that you wish to receive them. This is especially important if there is someone who might contest your estate or if there is someone you don’t want inheriting your estate. In any case, it is important to leave your loved ones with a plan.
Naming a beneficiary for your estate means your loved ones don’t have to wonder how you wanted your estate divided. It also saves time and resources because you don’t have to go through court to be settled.
What happens if you don’t name a beneficiary?
If you don’t name a beneficiary, you risk your estate going to probate court. Your family and friends will have to wait until a probate court reviews the estate before any assets can be disbursed. The process can take months or years depending on the size of the estate and may not be divided how you want it to be, making it even more important for you to name beneficiaries.
Where you may need to add or check to see if you have named beneficiaries:
• Investment accounts, including retirement savings, IRA, 401K
• Bank accounts
• Life Insurance
• Estate plans, wills, and trusts
Who do you choose as a beneficiary?
Naming beneficiaries to your estate is entirely up to you. Important considerations are:
• Taking care of minor children or adult dependents
• Providing for a spouse
• Choosing one or more people as beneficiaries
• If more than one beneficiary, how will the assets be divided?
Common beneficiaries include spouse, adult children, minor children, trust, or charitable donation to an educational institution or non-profit organization.
It is not only important to choose a beneficiary for your estate, it is important to consider exactly who is receiving the inheritance, or in some cases, who is NOT receiving an inheritance. Having clear instruction will help your family, in the event of your death, sort out your assets and settle your estate in the manner you wanted it to be settled.
For more information about estate planning and other services offered by Start and Blackwell, please contact us.