Selecting the Right Beneficiary
Developing an estate plan involves choosing individuals or organizations to inherit your assets in the event of your passing. Collaborating with an estate planner while drafting a will allows you to specify who will receive your belongings. These chosen recipients, whether people or entities like charities, are referred to as beneficiaries of your will. It is common to select multiple beneficiaries, especially when utilizing more intricate estate planning tools such as trusts. Apart from outlining beneficiaries in a will, you may also designate recipients for other asset types like insurance policies, retirement accounts, investment accounts, or pay-on-death (POD) accounts. Typically, loved ones are appointed to receive funds from these accounts upon your demise. For example, when purchasing a life insurance policy, you must designate a beneficiary to receive the death benefits if you pass away.
Primary v. Contingent Beneficiaries
The decisions regarding beneficiaries play a crucial role in shaping your overall estate plan regardless of whether it involves a will, trust, POD account, or insurance policy. Beneficiaries are individuals who stand to benefit from your assets upon your passing. Within this framework lies the distinction between primary and contingent beneficiaries; the latter steps in if the primary beneficiary is unavailable or unwilling to accept the assets.
Multiple Beneficiaries
In some instances, it may be necessary to appoint multiple primary beneficiaries for asset distribution purposes. This differs from having both primary and contingent beneficiaries since each primary beneficiary has equal entitlements to the assets unless explicitly stated otherwise.
Beneficiaries and Heirs-At-Law
Differentiating between beneficiaries and heirs-at-law is important as heirs-at-law are individuals who may inherit from your estate if no formal plan is in place at the time of your passing. While state laws govern intestacy cases where no formal plan exists, having designated beneficiaries ensures that your wishes dictate asset distribution rather than state statutes.
Consulting with a Brooklyn estate planning attorney can aid in designating both primary and secondary beneficiaries while crafting a comprehensive estate plan that considers various factors like advance directives and probate avoidance strategies. Regularly reviewing and updating beneficiary designations is essential given life's ever-changing circumstances.
For professional guidance on estate planning matters related to keywords such as estate planning, beneficiaries, and payable on death arrangements seek assistance from a local qualified attorney specializing in this field.
