When it comes to estate planning, making the proper beneficiary designations is an integral component of an effective estate plan. Understanding how your assets will transfer after your death helps you create an estate plan that ultimately grants your wishes and prevents unnecessary obstacles for your heirs. Some people may believe that creating an estate plan is too much work, or that they may not have enough assets to qualify as an estate. However, what you may not realize is that, (a.) your retirement savings are an important part of your estate, and (b.) your retirement savings will pass on to the beneficiaries named on the forms of your retirement savings accounts — not to the heirs named on your will or other estate planning documents. The same is true for life insurance.
“Avoid making mistakes that can cause an undesired effect after you die by properly designating your beneficiaries,” said Jim Ward. “As an experienced attorney in estate planning, I can help you avoid many of the common mistakes that are made when designating beneficiaries.”
A beneficiary designation clearly states who you wish to receive benefits upon your death. It’s imperative that you periodically review your estate plan with an attorney to make sure that all of your beneficiary designations are clear and current. This is particularly important when major life changes occur – including divorce, the birth of a child, the death of a beneficiary, or the marriage of a beneficiary.
Naming an “estate” as a beneficiary, not naming a beneficiary at all, listing a parent as a beneficiary after getting married and having children, not removing the name of an ex-husband or ex-wife as a beneficiary, or not having a contingent or secondary beneficiary are all very common mistakes.
In essence, reviewing and updating beneficiary designations is essential to creating an efficient distribution of your assets to heirs. Call Jim today for a free initial consultation so that he can assist you in choosing your beneficiaries strategically and within the context of your entire estate plan.