Naming Beneficiaries: An Estate Planning Tip for Everyone
With today's generous estate tax exemption of $11.18 million PER PERSON, many think that estate planning is only for the very wealthy. WRONG!! Regardless of your income or net worth, there is one estate planning move that every person should make right now.
Check the beneficiary designations on your life insurance, bank accounts, brokerage accounts, and retirement accounts. These assets are paid out in accordance with contractual designation and not through your estate. So, make sure that you have the proper person or trust designated on the beneficiary forms provided by the account holder.
What Happens if You Don’t Name Beneficiaries?
Failure to name a beneficiary could result in (1) the money being paid to your estate (for example, if the only named beneficiary designated predeceases you), which would require a probate, or (2) the money being transferred to some person that you no longer want to receive any money upon your death (divorced wife or step children, for example).
Your will or trust will NOT override contractual beneficiary designations.
You can name your trust, if you have one, or any other person(s) the POD (payable on death) beneficiary of bank accounts, life insurance policies, and stock brokerage accounts and retirement accounts.
Check all of your beneficiary designations, and name several successive beneficiaries so that the asset is never paid to your estate or a person that you don't intend to receive it.
Grayson P. Van Horn is an attorney at law serving Oklahoma residents and property owners.
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