Table of Contents

Is Probate Required if There is a Will?
When is Probate Necessary in New York?
Best Estate Planning Lawyers in Brooklyn: Why it is important?
Do I need an Estate Plan?
Estate Planning for a Married Couple: How to do it?
Estate Planning for Business: Why it is Important?
What is Estate Planning?
What does an Estate Plan include?
Is Estate Planning only for the Wealthy?
Estate Planning for Singles: Widowed, Divorced, and Never Married!
Estate Planning for Pets: Why it is important?
Estate Planning for Children: How to do it right?
Estate Planning Checklist: Important Guidelines & Details!
Estate Planning for Business: Why it is Important?
What Is Estate Planning?
What Does an Estate Plan Include?
Is Estate Planning Only For the Wealthy?
Estate Planning for Pets: Why You Need To Do It?
Estate Planning for Children
Estate Planning for Singles
Estate Planning Tips for A Married Couple
Do I Need an Estate Plan?
Estate Planning for Business
Estate Planning Lawyer
/Common estate planning scams you must ignore
Benefits of Estate Planning for Low Income Individuals
Why Estate Planning for Minors is Important?
Estate Planning for New Parents & Couples!
How to do Estate Planning for Non-US citizens?
How to do Estate Planning for Separated Spouse?
Estate Planning for Young Families & Couples!
Estate Planning Goals For Blended Families
What is Estate Planning in a Digital Age?
Estate Planning Strategy In The Digital World
Importance of Estate Planning In the Down Economy!
Estate Planning Is The Best Tool to Save Inheritance Tax
Estate Planning Process & Step by Step Guide!
Why Estate Planning for Elderly Parents is Important?
How to do Estate Planning for Digital Assets?
Estate Planning for Childless Couples & How to do it?
Custom Web Design
Estate Planning Errors to Stay Away From
Estate Planning Documents: All Must Have Important Docs in Details!
Estate Planning At Different Ages
Estate Planning and the Military; Understand the Importance!
Estate Planning: What happens when your spouse dies?
Estate Planning: Living Trusts vs. Will Difference & Importance!
Estate Planning Errors Through Digital Means
Do You Need A Probate Attorney After Estate Planning
Do Retirement Accounts Go Through Probate?
Estate Planning: Difference between a Will and a Trust!
Challenging Estate Plans – Fraud
Estate Planning: Difference between a Living Will & Power of Attorney

The basic document while planning an estate is drafting a will that sets the guidelines for the distribution of your assets to your heirs in your chosen way in the supervision of your chosen person. The person or organization receiving your assets are known as a beneficiary. You can name anyone except the person who acts as your witness while signing your will. While it is expected that your heir will outlive you, it needs not to happen always. Hence, you need to be careful while drafting your will and placing the provisions that your estate needs not to face probate for distribution.

Estate Planning-

The beneficiary can either be a single individual or multiple individual(s). In case of multiple beneficiaries, you are required to choose the way you want your assets to be distributed among them. The distribution can be equal or unequal based on circumstances and age of the beneficiaries. You can also distribute half among your heirs while the rest half in a charity or organization.

Apart from a will, you also might have invested in an insurance policy as well as retirement accounts which also require designating a beneficiary so that after your demise they can get the benefit of the policy or account. Here also, you can choose single or multiple beneficiaries for such accounts and policy.

Also, it is advised that you must designate an alternate beneficiary so that in case the primary beneficiary dies then the property can be inherited by someone of your choice. If you don’t name an alternate in your will, then a gift to a deceased beneficiary is said to have “lapsed” or “failed.” Depending on state law where you are residing and how the will is written, the property will go either to the residuary beneficiary named in the will, the beneficiary’s descendants, under your state’s “anti-lapse” law, or your heirs under state law, as if there were no will.

Why Your Will Should Name Designated Beneficiaries?

In case you die without designating a beneficiary in your will, it is said to be intestate. In such case, your estate will be subjected to the state court to decide its fate called a probate. Probate means that the distribution will be delayed, money will be wasted and it will be troublesome for the family as well.

To avoid a probate, you simply need to name designated beneficiaries along with the percentage share that each of them will receive. After your death, your heirs can present your death certificate to the financial institution, fill out a form, and they will receive the money within a few weeks. In this way, you can avoid probate, court involvement and save time and expenses.

However, in case you have minor beneficiaries who can’t receive the wealth directly according to the law and in case of spendthrift beneficiaries who can’t handle the wealth, then you need to think of some other options. Now a day, several such institutions allows the account owner to designate how the heirs can receive the death benefits which includes lump-sum, period certain, and amortization over the beneficiary’s life expectancy. You could even split up the benefit so that your beneficiaries get part of it as a lump sum with the balance as systematic payouts.

On the other hand, an IRA doesn’t allow you this however you can assign a custodian or a trust who will take care of your wealth. However, to manage this in a better way, you can opt for a IRA asset will that allows you to detail out what exactly you want along with the rights of the beneficiaries like the limit of transaction, etc. You can also extend the timeline till which the beneficiary can receive the money. However, according to the new laws effective Jan. 1, 2020, most non-spouses have been limited to a 10-year window for withdrawals from inherited retirement accounts.

Also, you must review these documents once in a year and if required update them as well. Apart from this, the document also need to be reviewed when a life changing event takes place in your life like remarriage, divorce, child-birth, etc. so that the beneficiaries should be according to your current wishes. Even you need to review the alternate or secondary beneficiaries accordingly as well.

Designating a beneficiary in a will or document is not that easy as it appears. It is advised to check the form carefully before signing. This will let you live peacefully to be assured that your loved ones will have long term financial security.

Categories

Recent Posts