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Beneficiary reviews prevent California estate surprises

On Behalf of | Nov 1, 2013 | Estate Administration |

Drafting an estate plan can be as much about what you do want as it is about what you don’t want. Maybe it has taken you several years to get to the point of meeting with an estate administration and planning adviser. Many Los Angeles residents want the distribution of assets issues finalized so they can get back to living instead of talking about dying.

Not so fast.

Beneficiaries are not a static bunch. The relationships beneficiaries have with you undergo sometimes sudden, but always constant, change. Children grow, marry and become parents. Spouses – yours and those of your heirs – fall in and out of love.

Think about your retirement account, the one you opened 20 years ago when you were married to a different spouse and had two, instead of four, children. At the time, you did what most people do; you chose your spouse as beneficiary. The spouse is now a long-time ex, but, without no beneficiary update, your old married partner stands to collect your pension.

Retirement plans often provide a default beneficiary, when none is named. Pension proceeds could end up in probate as part of your taxable estate. By naming a beneficiary, the asset can pass directly to a loved one and bypass the court and tax collectors.

You cover a lot of bases by naming contingent and secondary beneficiaries. For most people, a spouse is designated as the primary recipient of a retirement fund. Where will the money go if your spouse dies before you do?

Estate planning attorney advise revisiting an estate plan from time to time, but especially after any major shift in your life or a beneficiary’s – divorce, marriage, birth or death.

You’ve worked hard to put together a plan to share your assets. Don’t create problems by failing to make your beneficiary desires clear and reflective of the personal relationships you have today.

Source: news.ellwoodcity.org, “Six Costly Beneficiary Mistakes to Avoid” Robert A. Powell, Oct. 27, 2013