When you create your estate plan, you are doing so in large part for your beneficiaries. Beneficiaries are the individuals who will inherit your assets after your death. These assets can pass pursuant to your Last Will and Testament and also by joint ownership or beneficiary designation.
As such, your beneficiaries play an important role. You want to make sure you put time and effort into selecting the right ones for the right assets. You can also decide if a beneficiary receives the asset outright or in trust. But how do you do that?
Deciding who your assets go to
Forbes lists ways in which you could pass your assets on. First, most people will generally select only their spouse, family members, close friends, and other important figures as beneficiaries. After all, this is a chance to show your love or gratitude by giving a portion of your assets to an individual. Many also select charities or other similar groups as beneficiaries. This way, you can continue donating to a cause you believe in even after your death. You may name primary beneficiaries followed by contingent beneficiaries just in case your primary beneficiaries pre-decease you.
Prioritizing who receives assets
Who will need your assets right away? Your spouse may need the assets to live on. Minors may need assets but should only receive them in trust for protection until the minors reach certain ages. If you include a trust for minors, you will also want to designate a trustee to oversee the funds until the minor is 21, 25 or older. Otherwise, the minor may get the funds at 18 and may lack the proper maturity to handle them. You may have a special needs individual who needs a special needs trust, so they don’t lose their government benefits.
Choosing the right beneficiaries and determining how they receive their inheritance can still pose a struggle. If you want to learn more about your choices, consider contacting a certified elder law attorney.