Should I Choose Alternative Beneficiaries for My Estate?
Nearly everyone should consult with an estate planning attorney, to decide how, when and in what manner they want to pass on assets to friends, family or other beneficiaries. Taking this step ensures that your wishes will be granted after your death, and that your property is divided according to your directions. But how do you choose these beneficiaries and in what manner should they take property? For many people it seems to be an obvious decision: They simply designate their spouse or a child.
However, there can be several possible complications that arise from naming only one beneficiary:
- Your beneficiary could die or become incapacitated before you or at the same time as you. Most people name someone close to them, and therefore there is a higher chance that there is a common disaster.
- You might meet with your estate planning attorney, make your decisions, choose a beneficiary… and then forget or become unable to make necessary changes at a later date. If something happens to your beneficiary in the meantime, then the courts will follow a standard procedure for distributing your assets according to the state intestacy statutes.
- Some people designate a child as their beneficiary, assuming the child will be grown before their own death occurs. But if you should pass away before that child becomes an adult, or if he or she becomes disabled before your death, then complications can arise.
Other complications may exist. The point is that choosing alternative beneficiaries is almost always a good plan. In the case of children, you might choose to establish a trust, with control of that trust in the hands of another person (e.g., friend, family member, or professional fiduciary), until the child reaches the age of your choice.
If you currently have designated only one beneficiary for your estate, consider choosing alternative beneficiaries so that you can ensure that your wishes are met and that your assets do not escheat to the state. Meet with an estate planning attorney to make changes to your will or trusts, and remember to update your last wishes on a regular basis as circumstances change.