One of the most important aspects of the estate planning process is naming beneficiaries across all necessary accounts. This includes retirement accounts and life insurance policies most specifically.

It is important not only to name a primary beneficiary, such as the person that you intend to receive all of the assets when you pass away, but also to establish a contingent beneficiary. Most people will list the same person such as a parent, or their spouse as the primary beneficiary on all accounts. Naming a contingent beneficiary provides a plan for what happens if something occurs to that other person.

If your primary beneficiary passes away first and no contingent beneficiary is listed, this means the same thing as having no beneficiary designation. If you and the other person listed on the policy as the primary pass away at the same time, the funds go into probate.

The primary beneficiary also has more options when you name a contingent beneficiary because they may choose to execute a disclaimer so that certain assets can pass on to the loved ones who are next in line. Make sure that you use specific names when completing any of your estate planning documents as this can make things significantly easier for every person impacted by your estate planning strategy.

An annual review of all of your beneficiaries can help you identify problems and make corrections before any transfer to those beneficiaries is needed. Work with our estate planning lawyers in Pasadena, CA for this annual review.

 

 

 

 

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