Protect Your Estate

Beneficiary designations on things like life insurance, 401k, 403b, IRA’s, annuities, are very important.? If nothing is named - it goes to Probate Court.? If you have a primary beneficiary listed, but not a contingent, and you and the primary beneficiary die at the same time - that leads to probate as well.

Let’s talk about beneficiaries.? Beneficiaries are generally your immediate family, spouse or significant other, or even your children.? I use the word “small” in the video because when you nominate a person of your choice, there is little cost to your estate.? When you forget to name a beneficiary, I call that a “large” cost because you may have given your hard earned savings to creditors, probate, attorneys, and created a taxable event so in essence, you may have inadvertently nominated the IRS. You get to choose who your beneficiaries are and that is a great first step to planning for the future.

The reason you want to choose who your beneficiaries are, is so what you have worked so hard to earn, is left to those you care about.? For example, your 401k, 403b, pension, Roth, or Life Insurance all request you to nominate a beneficiary. ? 9 times out of 10, someone will come and see me and I will say “Let's take a look at your beneficiaries in your 401k.”? They will log in and they'll say, “Uh, they didn't tell me to do that.” Another common response is that the primary beneficiary is listed - this is the first person to receive the money, but there is no contingent listed.? Contingent beneficiaries are important because what happens if you and your spouse (or nominated primary beneficiary) die at the same time.? That opens the need for legal proceedings to find out who’s out there that would be entitled to the money.? Be sure to watch the video on estate planning - because without a Will, the expenses rise and so do unintended beneficiaries.

We like to help our clients do three things. First, make sure the beneficiaries are named, primary and contingent. In the beginning I talked about whether your beneficiaries could be small or large like the IRS.? Let's make sure that we eliminate the government or other unintended beneficiaries from receiving more of your hard earned money.?

If you don't have a spouse, significant other,? children, or immediate family members that you want to nominate, you can instead choose the charity of your choice. Most importantly, if you do have young children, make sure you have an estate plan (Wills, Trusts, Powers of Attorney), because an estate plan will direct what you want for your children - without an estate plant, your children would receive all the money at the age of 18. An estate plan puts in writing the person you want to help with the financial and legal aspects for your children.??

Second, talk about the right estate plan for you by working with your attorney to create a trust, or a testamentary trust specifically for your children's benefit. These documents allow you to? speak from the grave, so to speak, of what you want to have happen with your money.?

The third thing is to talk to those beneficiaries or trustees who are going to be getting this money from you in the event you're not here tomorrow. Have any of you experienced a loss in your family and it went to probate court or a loss in your family and nobody knew who was nominated as a beneficiary? The companies who hold onto the money will not release information to anyone but the beneficiary, and if there was not one nominated, then they will only talk to the appointed period through a Probate Court order.??

I help my clients design and protect their overall estate plan so that? what they want to have happen will be in writing in the event they are not here to make those decisions. The bottom line, “dot your i’s and cross your t’s” when it comes to beneficiary designations.? If you would like to learn more, feel free to give me a call.