Estate Planning And Beneficiary Designations: Five Tips That You Can Use
Properly designating your beneficiaries is an often underappreciated aspect of estate planning. As defined by Investopedia a beneficiary designation allows a person to inherit certain types of assets directly, outside of the traditional probate process. In this article, our Boston-based estate planning attorneys highlight five tips that you can use to plan for beneficiary designations.
- Do Not Forgot to Name Your Beneficiaries
One of the cardinal sins in estate planning is neglecting to name beneficiaries on your accounts. This seemingly simple oversight can cause monumental issues after you’re gone. Naming beneficiaries ensures that your assets are distributed according to your wishes. For retirement accounts, life insurance policies, and other financial products, having designated beneficiaries streamlines the process and prevents your assets from being subject to probate.
- A Properly Designated Beneficiary Allows You to Avoid Probate
Probate is the legal process by which a deceased person’s estate is settled and assets are distributed. It can be lengthy, expensive, and often diminishes the value of the estate due to legal fees and other expenses. By properly designating beneficiaries, you ensure that these assets are passed directly to them, bypassing the probate process. Probate can be expensive and time-consuming.
- Be Sure to Update Beneficiary Designations When Needed
Life is ever-changing, and so are relationships and family structures. It’s vital to review and update your beneficiary designations regularly, particularly after major life events like marriage, divorce, the birth of a child, or the death of a loved one. Failing to update beneficiaries can lead to unintended consequences, such as your ex-spouse inheriting your assets or your newest child being inadvertently excluded.
- Consider Selecting Contingent Beneficiaries
In addition to primary beneficiaries, it’s wise to name contingent beneficiaries. These are individuals who will inherit your assets if the primary beneficiaries predecease you or are unable to claim the inheritance. Without a contingent beneficiary, the asset may end up going through probate or being distributed in a manner contrary to your wishes. By naming a contingent beneficiary, you will have a backup plan in place.
- Coordinate With Your Broader Estate Plan
Beneficiary designations are an important tool, but they should be coordinated with your broader estate plan. It’s essential to make sure that your designations are consistent with the wishes expressed in your will and other estate planning documents. For instance, if you have a trust established for your children’s education, consider designating the trust as a beneficiary to ensure that the funds will be used for that specific purpose. An experienced Massachusetts estate planning lawyer can help you ensure that your rights and interests are protected.
Contact Our Boston, MA Estate Planning Attorneys Today
At Fisher Law LLC, our Boston estate planning lawyers are diligent, experienced advocates for clients. If you have any specific questions or concerns about designating beneficiaries as part of your estate plan, we are here to help. Contact us today to arrange your completely private initial case review. Our law firm provides estate planning representation throughout the entire Greater Boston Area.