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Have you properly designated beneficiaries for your estate?

On Behalf of | Aug 30, 2021 | Estate Planning |

There are generally two kinds of personal information you need when creating your estate plan. Beyond understanding basic probate laws, you also need information about your assets and about the people whom you wish to inherit your property.

Your heirs or beneficiaries may receive specific assets, control over financial accounts or a percentage of your total estate. Regardless of how you intend to split your property, it is important that you properly identify the beneficiaries in your estate planning paperwork so that the right people receive the appropriate assets.

You need to be specific in your last will

Some people use generic language in their estate planning documents which might later open up their wishes to challenges by family members and those expecting an inheritance who felt disappointed.

Rather than just using blanket statements like “my children” or “my family members” when allocating your property, it is typically better to identify someone using their full name. Some people even include beneficiaries’ birthdates and Social Security numbers in their estate plans so that there will be no confusion.

You need to complete beneficiary designations for accounts and insurance

You may have the option of ordering an account to transfer directly to someone else when you die. This is a common practice for investment accounts, saving accounts and other financial holdings. You can also designate specific beneficiaries for your life insurance and other insurance coverage.

Naming beneficiaries on individual accounts and policies is important, as these designations often supersede your estate planning documents because the designation allows the asset to bypass probate. In other words, if there is a conflict between your last will and the beneficiary designation on the account, the account records will likely determine who inherits that asset.

As with your estate planning documents, it is crucial to be specific about whom you want to receive your account or your insurance coverage in the event of your death. You will also need to update your documents frequently to remove people no longer in your family or those who have died.

Checking your estate plan for appropriate beneficiary designations and updating documents will maximize the control you have over your legacy after you die.