Orange County Estate Planning Attorney Shares Tips on Naming Beneficiaries
Neglecting to name a beneficiary or naming the wrong beneficiary could wipe out all of your estate planning efforts and put the disposition of your estate assets in the hands of the state. Here are some tips for getting it right:
Make sure you've actually named a beneficiary. Even if you've never completed formal estate planning, and all you have is a retirement account or life insurance policy through your employer, you are still allowed to choose who gets the asset when you pass on. Check with your employee benefits manager to make sure you have named a specific beneficiary and that the paperwork is properly signed and filed.
Don't list a minor as your beneficiary. While it's natural to want to leave assets to your children, a minor cannot legally hold assets in his or her own name. If you improperly leave assets to a minor, the court may have to name a guardian to control the assets until the minor reaches the age of 21 under the Uniform Transfers to Minors Act. Consulting a California estate planning attorney can help you sort out better options.
Don't name your spouse without thinking about it. Naming your spouse is very common and generally a good move - as long as you remember to update the paperwork if you get a divorce. However, naming your spouse on retirement accounts could cause unwelcome tax implications if it is not handled correctly. It's also important to remember that even though these assets pass directly to your spouse without going through probate, they are considered part of your estate and could be subject to estate tax.
Don't name your parents without discussing it with them first. Leaving a significant sum to well-off parents could push their own estates into a higher tax bracket. If they are less wealthy, your generous gift could disqualify them for state and federal benefits they may rely upon. Make sure you discuss any bequests with your parents and an estate planning attorney so you can be sure your gift does the most good.
The Flanigan Law Group provides Southern California residents with personal attention for estate planning, administration and litigation legal services. When disputes between families, arise, they are very successful in resolving legal estate issues quickly and efficiently while preserving financial and emotional resources. Contact the Flanigan Law Group at 949-450-0042.