What to think about when creating a beneficiary designation

On Behalf of | Jun 29, 2022 | Blog, Estate Planning

If assets remain inside of your Pennsylvania estate when you die, they will likely be subject to probate. In most cases, assets that have beneficiary designations attached to them will avoid this process. However, if a designation is not made properly, an item may revert back to your estate.

Did you use the right name?

It’s critical that you use a person’s full legal name on a beneficiary designation form. This is because you could run into problems if you use a nickname or if two people in your family share the same name. In such a scenario, including a unique identifier such as the middle initial of the person who should receive a specific asset may prevent a legal mess. If your intended beneficiary changes his or her name, be sure to update the document to reflect this change.

Should you leave property to those with special needs?

Leaving assets to people with special needs could jeopardize their ability to receive government benefits. Therefore, it may be better to leave it to a trust or some other entity that can manage those items on your intended beneficiary’s behalf. It may also be a good idea to speak with an estate planning professional before leaving assets to minors or others who may not be legally capable of owning property.

Typically, you can attach beneficiary designations to retirement, bank and other financial accounts. It may also be possible to add beneficiaries to life insurance policies or other assets that are allowed to sit outside of your estate. Using these forms may make it easier to ensure that your estate plan is carried out in a timely manner upon your death.

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