There are many pitfalls to be avoided when putting together your Estate Plan, especially if you try to do it yourself. For this post, I am going assume an Estate Planning Attorney is drafting your documents, which as you know is what I highly suggest everyone does. That said, naming beneficiaries is all on you and is a critical job when it comes to Estate Planning.
Before you can name who you want the asset to go to after your passing, you have to know what assets you have. If you own contractual assets (Annuities, Life Insurance, Retirement Accounts, to name a few) that include beneficiary designations, it’s important to name your beneficiaries; otherwise, your assets will transfer according to the contract’s default beneficiary provision –which is most likely your Estate. If your assets pass to your Estate, that could result in a timely probate process, additional estate expenses, and exposure to creditor claims to name just a few potential issues.
I discuss at length my client’s financial holdings at our initial meeting, and as their “homework” I have them gather copies of contracts, most recent statements, and current beneficiary designations. This exercise allows me to compile an Asset Inventory and advise my clients appropriately as to how they can “Probate Proof” themselves in conjunction with the documents I prepare for them. A full understanding of how your assets will transfer after your death helps create an Estate Plan that fulfills your wishes and prevents delays for your heirs. Designating beneficiaries incorrectly can have far-reaching negative consequences and is an essential part of your overall Estate Plan. If you are unsure about your Estate Plan or do not have an Estate Plan at all, make an appointment with an Estate Planning Attorney where you live. If you are located in the Daytona Beach area, call my office for a free consultation.