According to WealthCounsel, over a third of Americans have experienced or witnessed familial conflict when someone dies without an estate plan. While most people believe having an estate plan is important, only a third have a plan in place, per Caring.com's 2023 Wills Survey.
While most adults in the United States think all they need for an estate plan is a will, a comprehensive and effective estate plan involves more than simply making a will.
A crucial yet often overlooked component of estate planning is reviewing assets, such as 401(k)s, pensions, and savings accounts, and ensuring you have listed a beneficiary for each of these.
Designating beneficiaries often allows your assets to go directly to your loved ones without going through probate. In probate, the court will have to oversee the distribution of assets in an estate.
Selecting recipients for individual assets is essential because if you do not designate beneficiaries for your assets, they become part of your estate subject to probate. Those who receive your assets might be different from whom you had intended accordioning to your estate planning goals.
Reviewing your assets and ensuring you have your loved ones listed as beneficiaries gives an extra layer of protection that they will receive what you envision passing on to them.
Review These Assets to See if You Have Made Designations
As part of creating your estate plan, you should assess your assets and determine whether you have listed beneficiaries and that your selections are up to date, including retirement accounts, annuities, pension plans, bank accounts, investment accounts, health savings accounts, life insurance policies, and even real estate and other assets.
Multiple Beneficiaries and Successors
In many cases, you may name more than one beneficiary. For instance, a person with two children might want to leave an asset to them both. Depending on the type of asset, you can state how much of the asset each child receives.
It is also vital to consider successor beneficiaries. A successor obtains the asset if the original recipient passes away. For instance, you could list a beneficiary and a successor on a pay-on-death account.
You can change whom you listed as a beneficiary as your relationships and circumstances evolve. When you designate a beneficiary on an asset such as an account, they assume ownership only after you die. Generally, they will not have an ownership interest while you are alive and can handle your own affairs.
Estate Planning Attorney
Organizing your assets to plan for the future can be challenging and complex. With the help of an estate planning attorney, you can develop a solid plan to distribute your assets to your loved ones according to your wishes. An estate planning attorney near you can help you review your assets and name beneficiaries as part of creating a robust estate plan.