Beneficiary designations are essential to estate planning, particularly for assets like annuities, life insurance policies, IRAs, and employer-sponsored retirement plans such as 401(k)s and 403(b)s. These designations allow you to specify who will receive these assets upon your passing directly, bypassing the probate process. It's essential to regularly review and update beneficiary designations to ensure they align with your current wishes and circumstances, especially after significant life events such as marriage, divorce, births, or deaths in the family. We recommend updating beneficiary designations to avoid unintended consequences, such as assets passing to individuals you no longer wish to receive or excluding new beneficiaries. In this blog, we will explore why your beneficiary decisions matter.
Beneficiary Designations Take Precedence
Beneficiary designations typically precede instructions outlined in a will or trust when distributing certain assets. This means the assets designated to specific beneficiaries will pass directly to them upon your death, bypassing the probate process and any directives specified in your will or trust regarding those assets. It's crucial to understand that the beneficiary designation form you fill out with the financial institution or plan administrator supersedes any conflicting instructions in your will or trust. Therefore, ensuring that your beneficiary designations are up-to-date and accurately reflect your wishes is essential.
Designate Primary & Secondary Beneficiaries
When designating beneficiaries for your assets, it's advised to designate primary and secondary beneficiaries, also known as contingent beneficiaries. Primary beneficiaries are your first choice; secondary beneficiaries are there for backup. Primary beneficiaries are the individuals or entities who will receive the assets if they are alive upon your passing. They are the first in line to inherit the assets. Secondary beneficiaries are the individuals or entities who will receive the assets if the primary beneficiaries are deceased or unable to inherit the assets for any reason. They step in as the beneficiaries if the primary beneficiaries cannot receive the assets. By designating both primary and contingent beneficiaries, you ensure that your assets are distributed according to your wishes, even if your primary beneficiaries cannot inherit them. This can help avoid complications and uncertainties in the distribution of your assets.
Contact Attorney Andrew Bucklin For Beneficiary & Estate Planning Services
Ensure the smooth transfer of your assets and provide for your loved ones by taking proactive steps in your estate planning with Attorney Andrew Bucklin. He serves all of the North Shore with his comprehensive estate planning services. He will ensure the safety and security of your loved ones. To start your beneficiary designations in Massachusetts, contact Attorney Andrew Bucklin today. For a free consultation, you can fill out my contact form here or give me a call at 781-632-8675.