Creating And Protecting Your Legacy

Beneficiary designations play a key role in estate planning

On Behalf of | Jul 20, 2020 | Estate Planning |

Florida residents may focus on their wills as the centerpiece of their estate plan. However, Kiplinger notes that beneficiary designations also play an important role in your estate planning. 

Our law firm has experience helping clients design thoughtful estate plans. 

Beneficiary designations are not covered by your will 

A beneficiary designation allows you to name family members who will inherit specific assets upon your death. Naming a beneficiary is a simple process that involves your completing and signing a designation form. Assets that commonly pass this way include life insurance proceeds, retirement accounts and annuities. You may also name beneficiaries for some non-retirement accounts. 

Spouses generally receive retirement assets on the death of the account holder. If you are not married, your retirement accounts may go into your estate, subject to distribution in full within five years after your death. This may result in acceleration of deferred income taxes. 

Focus on details, and keep your designations up-to-date 

Be attentive when you complete your beneficiary designation forms. You may have family members with similar names, and if you overlook nuances like a reference to Sr. or Jr., family members could find themselves arguing over your intentions. You must also review and update your beneficiaries from time to time, as relationships and names may change with marriage or divorce. 

You may name a trust as beneficiary 

Your personal circumstances may make it prudent to create a trust to serve as beneficiary. You may need a trustee who can manage assets for minor children or family members with special needs. A trust may also protect assets for family members facing financial challenges or receiving government benefits. 

Creating an estate plan allows you to direct distribution of your assets consistent with your wishes upon your death. You may consult our website for information about estate planning considerations.