Beneficiary Designations & Your Estate Plan

Your beneficiary designations are critical to a good estate plan.  But, they are often overlooked!  Combined with the right estate plan, these two factors can really organize your financial affairs.

Also, the good news is that you don’t even need an attorney to designate your beneficiaries or payable on death (“POD”) designations.  All you need to do is contact your financial institutions so that your account will simply pass to your designated beneficiary or POD designation.

So, for instance let’s say you have been married for a while.  But, maybe you haven’t had a chance to update the beneficiary on your life insurance.  So, it still names your sister and brother as beneficiaries.  Let’s also say you recently had a baby.  And, maybe that life insurance beneficiary is still set to your brother and sister.  
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If you pass, your spouse and young child will not receive those benefits.  They will pass directly to your sister and brother.  Well, that’s probably not what you planned.  That's probably not even what your sister or brother would want either. 

Let’s say that instead, you list your beneficiaries like this:

• First beneficiary: Your spouse
• Second (successor or contingent) beneficiary: Your child
• Third (successor or contingent) beneficiary: Your trust

This way, your life insurance proceeds will pass directly to your spouse.  If s/he isn’t around, then it will go directly to your child.  The last case scenario, passing those benefits to your trust, would apply if neither of those options are available.  

Your trust is available to guide your loved ones as to your wishes. In this example, without this plan and a trust, your loved ones will not have any guidance, and may have to seek court guidance. 

​Court guidance = attorneys, attorney’s fees, paperwork and waiting.  We want to avoid that.  A trust will help you to avoid that. 

This is just one example of how the right beneficiary designations and estate plan can work together to keep as much coin in the family bucket, so to speak. 

Interested in seeing how an estate plan can help you or your family? Please contact me for a complimentary consultation to discuss your options.