It is a sad fact that in our youth orientated culture we often do not take care of basic paperwork in terms of designating our beneficiaries of our estate. It is often not appreciated that even such basic items as pensions and pension plans were seldom discussed or looked into until judgment day , as it may be called ,came to pass . America was a youth orientated culture on the go. It is only with the coming of the large scale retirements of the baby boomers have issues such as retirement plans , retirement planning and estate divestment become areas of general talk and interest.
You have to remember that ultimately your goals are to provide for and make life easier for those you love and are concerned for. By not taking proactive action in naming beneficiaries of your estate after you are gone you may well cause these same people or groups who you want to help undue discord, discomfort and aggravations and even hardship. Be proactive.
The purpose of naming a beneficiary is to ensure a quick, thorough and efficient transfer of assets upon a person’s end of life. Be specific. If your intention is to leave assets or death benefit proceeds to a particular individual, relative, institution or organization then name that person or group as your beneficiary. Lack of a specific name can result in needless delays in processing that claim potentially resulting in hardships to those you actually wanted to help. If there is land, real estate of stocks to divide indicates percentages. If you name more than one person as beneficiaries, it is important to name their shares. For example Aidun Smith 50 %, Shooter Labby 45 % and Greg Jones 5 %.
It is always best to discuss coordinating your will and the beneficiary designations with your legal advisor, be it your lawyer, barrister or attorney to make sure that you work together and are coordinated. For example if the will divides an estate between two children , but only one child is designated as the beneficiary of the life assurance policy , did the parents intend for remaining child to get half of their estate plus the life insurance proceeds or should an adjustment made > Why leave such things for chance and debate ?
Consider designating a contingent beneficiary just in case the primary beneficiary predeceases you.
If you name a minor child as beneficiary, then make sure there is a provision for naming a trustee for the minor child in the will. The trustee will manage and distribute the money according to your wishes where a proper trust document has been established.
Otherwise a publicly appointed representative might be appointed to manage the funds and estate that you worked so hard over your life to create , until such time as the child comes of legal adult age- then the remaining funds will be given to that child now legally and adult.
Generally , if a beneficiary , other than the “estate” , is designated then the assets from the registered account, segregated funds or the death benefits of life assurance policies may be distributed outside of the estate potentially bypassing administrative fees and some taxes and costs. Whether or not to probate fees is a question whose answer depends on the specific rules and regulations of your state of residence.
Remember though that naming a beneficiary is not a one time single events. It can change from time to time and over time. Significant life changes such as a change in marital status, death and birth necessitate a review of your situation and designations. For example if you are married, then you most likely have named your spouse as the beneficiary of your plans. Should you divorce, the beneficiary designations may well change, but only if you see to it. Changes do not happen automatically by themselves.
In the end it all comes down to forethought and planning. Not to plan is to be inconsiderate and cause unnecessary grief and hardship to those people who you care for the most. Be proactive.