When planning your estate, one of the most important things to think carefully about is who you want your assets to go to after you pass. For some people, the answer may seem easy – a spouse, child, or close friend, perhaps. For many others, it’s more complicated than that. Some people have multiple children they want to divide their assets amongst. Others may have been married multiple times or never married at all. There are countless circumstances and situations that can complicate your choice of beneficiary. Read on for Blackford & Flohr’s advice on choosing the right beneficiaries for your estate.
What Are Beneficiaries?
A beneficiary is any person you identify in your estate plan as someone who will benefit from your estate. These benefits can be financial or material. Beneficiaries are named in several parts of your estate plan, such as:
- Last will and testament
- Savings and checking accounts
- Life insurance policies
- Retirement plans
Primary and Contingent
Many wills provide for primary and contingent beneficiaries. Primary beneficiaries are those who are designated to inherit your assets no matter what, and contingent beneficiaries will inherit assets only upon the occurrence of certain events. If that event does not occur, the person will not benefit from the estate. For example, a contingent beneficiary may be a person who is in ill health, and their inheritance may depend on whether they survive you as the owner of the estate.
How to Choose a Beneficiary
Selecting the right people to inherit your hard-earned assets and treasured property is important. You will want to carefully consider every person that is close to you. To some, this choice may be relatively easy. An individual with a long-term marriage, for example, and a spouse in good health may want to leave all or some of their assets to that spouse. This is a relatively low-risk decision, and others can be named to inherit should something happen to your spouse before your own passing.
However, there are lots of factors that can make this decision more difficult. You may have children who have experienced challenges in life and may not be able to manage large sums of money. You might have a dependent who is unable to care for themself, or you might not have children or a spouse and feel unsure about who to designate. It’s best to consult with an experienced wills and estates lawyer if you are interested in planning your estate. Your lawyer can help you look at all of the facts and make the best, most informed decision.
Things to Consider
It’s a good idea to consider the following when evaluating your beneficiary options:
- Money management ability
- Relationship to you and your family
- The amount you can leave to each person
It’s best to try to choose beneficiaries you feel confident could manage the money and assets you leave to them properly. It might be difficult to think objectively about your loved ones, but this is the most critical time to do so. You have worked hard all your life for your money and the things that you have. You want to ensure those assets go to those who will manage them properly and make the best of them.
Evaluate Assets Individually
You will want to evaluate all of your assets individually and think about who will benefit from them the most. Perhaps you own a cherished property that has a great deal of sentimental value to you and your family. You may want to leave this asset to a person you know will value it, take care of it, and allow your other loved ones to continue to benefit from and enjoy it.
Alternatively, you might have a lot of financial assets. Considering how hard you’ve worked to earn those assets, you likely want to provide for specific people after your passing. Maybe those people are not able to manage large sums of money, however. There might be someone better equipped to care for those people with your resources on your behalf. These are the types of circumstances that can occur in any estate plan and make choosing beneficiaries a process that requires a great deal of thought and attention.
Work with an Estate Planning Attorney
The best way to choose the right beneficiaries and create a strong will and estate plan is to enlist the help of the best estate planning attorney in your area. Your attorney will have experience dealing with complicated estates and will be able to offer you valuable advice based on that experience.
If you are planning an estate in Maryland, Blackford & Flohr can help. We bring decades-worth of experience to each and every case to ensure the best beneficiaries are selected and that your assets will be properly distributed after your passing. Contact us via our online form to connect with an Anne Arundel County wills and trusts lawyer, or call 410-647-6677 today.