If you have ever thought about the future of your legacy, you may have wondered what a beneficiary designation is and who you should pick to be one. Deciding who your beneficiaries are going to be may feel straightforward for some people, and more complicated for others. Do you want to leave your assets solely to your spouse or children? Or is there a charity organization you are passionate about? Are there several people you want to each leave a portion of your assets to? These are all normal questions to have, and if you need guidance on how to get started you may want to speak with an estate planning lawyer for further help.
Essentially, a beneficiary designation is naming someone to inherit an asset in the event of the owner’s passing. When the person dies, their assets are distributed to the beneficiaries they have chosen. It is possible to choose your estate as a beneficiary, which means that instead of giving assets to an individual, assets are transferred to the estate. Then your assets are distributed based on the provisions described in your will or trust.
When preparing your estate plan, you will have to designate beneficiaries for several different kinds of items, from life insurance policies to bank accounts or vehicles, and other tangible or intangible assets. There is no rule for who you should pick as a beneficiary, however, they should be the people in your life that you cherish most.
In many cases, people choose their spouse as the main beneficiary, and then their children as secondary beneficiaries. However, how old your children are may be a factor. To protect your family and children, you may have to do more than just establish a primary and contingent list of beneficiaries. You may also want to choose guardians for your children in the event of your early departure, so they have people to come to their aid immediately without pause.
After you have concluded who you want to receive certain assets after you die, the work doesn’t stop there, as you must review your estate plan periodically so that it reflects your current life and relationships. For instance, if you have since divorced from your spouse and they are named as your primary beneficiary, then you may want to change that to someone else. Or you have experienced a vast change in your financial situation or assets and need to make edits to your documents accordingly. If you need to quickly update your estate plan, it helps to have a lawyer assist, as a team member at Law Group of Iowa can tell you, to ensure it is still legally binding after changes have been made.
Ultimately, who you choose as your beneficiaries is going to be a personal decision, and you will know in your heart who you should choose. Many people find that after writing their estate plan, they have more peace of mind knowing the future of their legacy is planned for and that their family is protected.
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