Building a legacy for your loved ones is a meaningful and lasting record of your life, and protection of your loved ones’ futures. Your legacy can be your children and grandchildren, a lifetime of memories, a successful career or property and assets that you have earned. Your family and the memories you leave behind exist without any additional planning on your part. But leaving a financial legacy to protect the futures of your loved ones requires careful documentation and estate planning. When you plan for the distribution of your financial legacy after you are gone, a key consideration is choosing your beneficiaries – and then, you have to decide who gets what.
A beneficiary is someone who inherits your things – your stuff – when you are gone. You can name your beneficiaries in your will or trust, and for other assets. You should name a beneficiary for all of your assets including:
• property
• money
• insurance policies
• retirement accounts
• stocks and bonds
• IRAs
• bank accounts
After you make an inventory of all your assets, you need to choose a beneficiary for each of those assets. Naming beneficiaries will simplify the process of settling your estate after you are gone, and save your heirs time, money and stress.
In choosing your beneficiaries and deciding who should inherit your things, ask yourself these questions:
1. Who needs your financial assistance?
2. Do you have children who are minors?
3. Do you have pets you want to protect?
4. Can you safely leave your heirs an inheritance without any conditions?
5. Do you have any assets that you want to remain in the family?
6. Are there any churches, charities or nonprofits you want to donate money to?
If it’s been more than 5 years since you last did a thorough review of your account beneficiaries, or if you’ve had significant life changes, now is the time to rethink your beneficiaries.
1. Your estate can have 1 beneficiary or many.
2. You can leave your money or possession to a charitable organization or a pet – your beneficiary does not need to be a person.
3. Your beneficiaries do not have to be family members.
4. You can choose to exclude family members as your heirs.
5. You can name a contingent beneficiary – someone who will inherit your things if the primary beneficiary dies before you do.
6. You can name your beneficiary’s heirs as your contingent beneficiaries.
7. A beneficiary trumps a will: if you name a beneficiary on a retirement account, but leave that same account to a different person, the named beneficiary on your account will override your will.
We’ll discuss how to decide who gets what in a future blog post.
Learn More:
• How To Make An Inventory Of Your Assets – and Decide Who Gets What
Estate planning is preparing for the future. Contact Estate & Probate Legal Group in Lombard Illinois today at 630-864-5835.
AREAS WE SERVE: Cook, Dupage, Kane, Lake, and Will counties
