What Factors Should You Consider?
One of the most important considerations when writing a will or trust is who will inherit your estate. The process of selecting a beneficiary or beneficiaries for your assets is a personal and emotional process. There are many factors to consider:
- Who depends on you financially?
- Who are your immediate and extended family members?
- Are there any assets you would like to remain in the family?
- Are there any family you do not want to include in your estate plan?
- Who has your best interests in mind?
- Do you want to support any charities or organizations?
Why Do You Need a Beneficiary?
No matter the structure of your family, age or the size of your estate, it is important to designate a beneficiary or beneficiaries to inherit your assets when you die. Sometimes it is difficult to think about the future, one’s death, or family dynamics; however, it is essential not to postpone thinking about these decisions. If you die without named beneficiaries in a will, living trust, or payable upon death accounts, you have no control over how your assets are distributed after your death.
Who Should You Select as Your Beneficiaries?
When selecting beneficiaries for a will, living trust, or payable on death account, there are two types of beneficiaries: primary and contingent. A primary beneficiary is the first person you want to inherit your assets while a contingent beneficiary is the second person you want to inherit your assets if the first person is deceased or unable.
In addition, there are several situations to consider when selecting a beneficiary or beneficiaries:
- If you are single
If you are single, you may wish to share your assets with your children, grandchildren, parents, siblings, or extended family.
- If you are in a relationship
If you are married or have an unmarried partner, you may wish to share your assets with your spouse or unmarried partner, your children or grandchildren, your spouse’s or unmarried partner’s children or grandchildren, your parents, siblings, or extended family.
- If you don’t want to include your family
A disagreement or conflict of interests between family members may cause you to disinherit your family or specific family members. If you don’t want to include your immediate family or a specific family member in your estate, you may wish to share your assets with friends, distant relatives, or charities.
- If you don’t have children or family members
If you are do not have any children or family members, you may wish to share your assets with close friends, non-profit organizations, or charities. It is not uncommon to select charities or non-profit organizations that share your interests or beliefs as beneficiaries in your estate.
When creating your will, living trust, or payable upon death accounts, it is important to select beneficiaries that represent your interests and personal responsibilities. Making these tough, emotional decisions will give you peace of mind that your assets will be distributed according to your wishes. In addition, your beneficiaries can focus on the honor of your memory and not focus on the stress of an unplanned estate after your death.