Things To Consider When Choosing Beneficiaries

A primary reason to create an estate plan is to designate beneficiaries who will receive certain property once you pass away. Choosing your beneficiaries, therefore, is not something you should take lightly. While you may know who you want to name as a beneficiary, there are certain factors you should consider. Below, our St. Petersburg estate planning lawyer explains what these are.

Work with an Attorney

You should always work with an estate planning attorney when drafting your Will and other important documents. A lawyer will take the time to review your situation and understand your goals to ensure you have an estate plan that accurately reflects your wishes. A lawyer may present options for your plan or possible outcomes of your desired plan that you are not otherwise aware of. If you do not work with a lawyer and you decide to draft your own estate plan, you may make a mistake that may even void your will, trust, and other important pieces of your estate plan. A lawyer will make sure no mistakes are made and will provide important advice about how to make your wishes a reality.

Specify Heirs You Do Not Want to Include

Most people know the importance of including beneficiaries in their estate plan so they can receive certain property and assets. However, it is equally important to name anyone you do not wish to receive any of your property. You should include any heirs you do not wish to leave property to in writing, and do not leave them any type of gift. When an heir does not inherit under your estate plan, they must be notified when your estate plan is in the probate process, which could open it up to challenges and result in probate taking months or even years.  This is why it is important to use an attorney to draft your estate plan to ensure you are prepared for any future challenges to your estate plan.

Name Beneficiaries for Bank Accounts, Insurance Policies, and Investment Accounts

Naming beneficiaries for your bank accounts, insurance policies, and investment accounts is just as important as naming heirs in a will or trust. These accounts are often transfer-on-death (TOD) or payable-on-death (POD), which means upon your death the funds can be dispersed directly to the beneficiaries by the financial institution. There is no need for them to go through probate, which means your loved ones will receive access to these accounts quicker than they would if a probate was necessary.

Consider a Trust for Beneficiaries

It is important to determine if your beneficiaries will be able to make sound decisions about their inheritance. If you know that one of your heirs does not usually make responsible financial decisions, you may want to consider placing their inheritance in a trust instead of giving their inheritance to them outright. By using a trust, you will have more control over how and when assets can be distributed to an heir. A trust can also provide creditor protection for the heir, so the heir will not have to spend their inheritance to pay off a judgment from a creditor.

Review Beneficiaries Regularly

You should consider updating your estate plan at any time there is a major life event in your family, such as a birth, death, marriage, or divorce. Major life events usually cause a shift in the family dynamic, so it is important to review your estate plan after any of these major changes to ensure your plan still accurately reflects your wishes. You should also review your estate plan regularly to ensure your beneficiary designations are still intact. For example, sometimes beneficiary designations do go missing when financial institutions merge, so you will want to periodically confirm with your financial institution that the proper beneficiary designation is still on file.

Call Our Experienced Estate Planning Lawyers in St. Petersburg for Help

If you have questions about naming beneficiaries, or any other aspect of your estate plan, our St. Petersburg estate planning lawyers at Legacy Protection Lawyers, LLP are ready to help. Call us now at 727-471-5868 or contact us online to schedule a consultation.

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