Hiring a McKinney estate planning attorney is one of the smartest ways to manage your assets during your lifetime, and to make arrangements for after your death. Naturally, determining the estate’s beneficiaries is one of the key aspects of the process, providing peace of mind to both you and your loved ones. However, you may not be familiar with the concept and process if you have never created a will or trust before. Here are the main points you should understand about beneficiaries.
Understanding Estate Plan Beneficiaries
When you are looking at creating an estate plan, there are a lot of key terms you will need to fully understand. Beneficiaries are one of the most important people named in your will or trust. A beneficiary is the individual or individuals who will benefit from your will or trust. Put plainly, they are the ones who will take ownership of your assets once you pass away. Lucé Law, PC is happy to explain to you the estate process and what being a beneficiary means. Here are a few important things you need to know about beneficiaries.
Who Are Beneficiaries?
Beneficiaries are specifically named within the trust or will and only the assets you specify should go to them. This is different than passing away without a will or a trust. When you die without any sort of estate documents, your assets will be distributed based on intestate rules that vary from state to state. Typically, the assets are distributed starting with your spouse and immediate family members, and then any leftover assets are spread amongst extended family. If you have no descendants, then your assets would become property of the state.
How to Choose a Beneficiary
One of the reasons estate planning is important is that you can designate exactly how your assets are distributed. Most married people choose their spouse as their beneficiary, though any individual or organization could be named. In an estate plan, you would name a primary beneficiary (the first person, multiple people or organizations in line to receive assets). In addition, you can name contingent beneficiaries (those who would receive assets if primary beneficiaries pass away or cannot be located).
Why Is Naming Beneficiaries Important?
It is important that you specifically name beneficiaries when you want to make a specific gift. It can also be helpful when there are specific family members you would not like to name in your will or trust who would inherit based on an intestate distribution. By naming specific beneficiaries, you can ensure that your assets are divided according to your wishes after you pass away.
Can I Make My Children Beneficiaries?
Children can be beneficiaries at any age, and many parents place assets in a living trust for younger children. A trustee is appointed who will oversee the process in case of your incapacitation or death, ensuring that children receive payments – rather than a lump sum – to cover the costs of their care.
McKinney-Based Estate Planning Attorney Services
If you want experienced guidance and legal representation in the North Texas area, contact Lucé Law, PC today. We can help with estate planning, family law, business law and much more. Call (972) 632-1300 or request a free legal consultation now.