If you want to ensure that your loved ones are taken care of after your death, estate planning documents like wills or trusts can be crucial. While these documents could save your heirs both time and money, failing to update your corresponding beneficiary designations may undo your best-laid plans. If you need to create a plan to care for your family or friends after your death, make sure you speak with an experienced estate planning lawyer about the importance of beneficiary designations in Lombard.
After a person dies, the way his or her property transfers to his or her heirs depends on the type of ownership for each asset. If the decedent owned the property in his or her name alone, that property would go through the probate system. If, however, the decedent held property jointly with another person or included a beneficiary on the account, the asset may transfer automatically at death without needing intervention from a probate court judge.
Beneficiary designations are common on financial assets like life insurance policies, bank accounts, annuities, IRAs, and retirement savings accounts. The beneficiary designation names an individual other than the owner of the account who would receive ownership of those assets when the account owner dies.
When the holder of an asset like a bank account or insurance policy names a beneficiary in Lombard, that designation takes precedence over the terms of a will or a trust. Because those assets transfer automatically at death, they do not go through the probate process and would not be part of an estate administration case.
When a person creates an estate plan, he or she needs to be sure to update his or her will or trust(s) periodically, as well as his or her beneficiary designations. If the testator forgets, the person who was intended to receive that asset would likely have little recourse.
The best way to avoid problems with beneficiary designations is to reassess them frequently. Whenever a person goes through a major life event, like getting married, divorced, or having a child or grandchild, it is essential to make sure that all estate planning documents reflect the new situation.
People planning their estates should also remember that they may outlive their beneficiaries. Accordingly, it is often a good idea to name an alternate beneficiary in case the first person dies or unwilling to inherit the asset.
Individuals should also be wary of opening joint accounts unless they want the joint owner to receive the entire balance of that account on their death. For example, if a person adds one daughter as the co-owner of an account so that she could help pay bills or keep track of her parent’s finances, ownership of the jointly-owned account would transfer immediately to the daughter alone after the parent’s death.
In this situation, the other siblings would not be able to inherit anything from that account, regardless of the terms of a will or trust. Putting specific terms in a will or trust could ensure that the executor of the estate will transfer the property according to the testator’s wishes.
Beneficiary designations may make the process of transferring property after death faster and easier for everyone involved. Making the correct designations may prove to be tricky, though, and making a mistake in the process can potentially cause annoying and expensive problems that an attorney might not be able to fix. Avoid issues with your beneficiary designations in Lombard by contacting a lawyer today.