Selecting Your Beneficiaries

 Posted on April 04, 2017 in Estate Planning

For most people, the primary goal of estate planning is make sure that their wishes are carried out regarding their assets and property upon their death. Wills, trusts, and other instruments can help you do so, but the real challenge, in many cases, is figuring out exactly what you want for the future of your estate. An estate planning attorney cannot make such decisions for you, but we can give you some things to think about in making your choices.

Include a Variety of Heirs

Too often, people make the mistake of naming their spouse as the sole beneficiary of their estate. What if he or she outlives you? What will happen your estate plan then? You may also be tempted to leave everything you own to one of your children. As you develop your will, you must remember that you are looking toward the future, and the future is always full of uncertainty. If you choose a single beneficiary and something happens to him or her, the disposition of your estate could depend on that person’s estate planning decisions instead of your own.

Instead, consider naming multiple beneficiaries or creating secondary or tertiary contingencies. For example, your spouse may be your primary beneficiary, but if he or she dies before you do, a secondary beneficiary—such as a child or grandchild—could inherit the portion of the estate that would have gone to your spouse.

Family Relationships

It may be tempting to take a “not my problem” attitude when it comes to what will happen in your family after your death. While such issues are not solely your responsibility, you have the power to at least avoid creating new problems. The period after your death will be an emotional one for your loved ones, so it is important for you to take reasonable steps to prevent misunderstandings and family rifts.

For example, you may decide to leave most of your property to your oldest child with the verbal direction that he or she is to distribute the estate among your other children and grandchildren. Your verbal direction—no matter how much your child promises you that it is—is not a substitute for explicitly naming the other heirs in your estate plan. If you leave your property to one person without further instructions included in the will, he or she is within his or her legal rights to simply keep the full inheritance.

Avoid Conflicting Beneficiaries

You must also be certain that your drafted estate plan does not create conflicts with existing beneficiary provisions in other contract or agreements. For example, your investments accounts or life insurance policies probably contain beneficiary provisions that designate a person who will receive the proceeds of the accounts or policies. Contradictions between your will and such accounts could require court action to determine who will get what benefits, effectively eliminating your control over the situation to make the decision for yourself.

Meet With an Estate Planning Attorney

Before you draft, sign, and execute your will, contact an experienced Lombard estate planning attorney for help with deciding on your beneficiaries. Call A. Traub & Associates at 630-426-0196 for a confidential consultation today.

Sources:

http://www.marketwatch.com/story/how-to-choose-a-beneficiary-1304670957977

https://www.wsj.com/articles/SB10001424052702303714704576383523441136038