When planning your estate, you might think only of a last will and testament to pass on your belongings to your family or other heirs. However, some assets can pass through a beneficiary designation instead of your will.
Beneficiary designations in Upper Marlboro estate planning can be crucial to managing your finances, especially when crafting your will. A knowledgeable estate planning attorney could help you make a will and manage the designations for your other assets.
Planning for the Future
A will is usually the most important document for estate planning purposes, as it controls most of a person’s property after death. A will appoints an executor to administer the estate, names who will inherit and how, and provides for other instructions as desired.
Some assets, such as insurance policies and financial accounts, may have a separate path for passing down in the form of beneficiary designations. With these assets, a person signs a contract with an institution, such as a bank or insurance broker, to name one or more beneficiaries.
Beneficiary designations can direct the institution to change ownership of a policy or pay out proceeds to a specific beneficiary rather than in accordance with a will. Someone with multiple children, for example, might have one child aiding them with finances and coordination who is also their beneficiary under multiple policies and accounts. That child would receive the relevant funds, even if the person’s will would have those funds shared among all the children.
Ensuring that all a person’s assets pass as intended requires coordination with their will and beneficiary designations. An attorney in Upper Marlboro who handles estate planning could lay out and discuss beneficiary designations with someone actively planning for end-of-life.
Making Sure Your Loved Ones Inherit as You Wish
A potential consequence of not lining up beneficiary designations with a will is the underfunding of an estate. A will can provide instructions for distributing a person’s property as they choose, but it can only affect what is present.
Beneficiary designations essentially remove assets from the will by sending them to the beneficiary instead, which can leave an estate without liquidity and unable to pay out the will’s heirs. To avoid this result, a person should carefully plan their will and designations for their accounts and instruments.
An estate planning attorney working with a client to create a will could also walk through that client’s beneficiary designations in Upper Marlboro or Largo to provide a well-rounded estate planning process. A lawyer could make sure their client’s intentions are reflected across all assets.
Seek an Attorney’s Advice for Beneficiary Designations in Upper Marlboro Estate Planning
Most people complete beneficiary designations as a normal part of buying an insurance policy or of opening a brokerage or retirement account. Without forethought regarding what effects these designations can have, you might find that your will and accounts do not fully line up.
You can discuss beneficiary designations in Upper Marlboro estate planning with a lawyer. Coordinating your intentions across all your property can avoid confusion and an illiquid estate, so call our office to schedule a consultation.
