Choosing beneficiaries for your estate is a tough task. There are so many ways to distribute assets that every decision needs thorough consideration. The wrong people will fight in court for the entire estate instead of sharing. The sad part is there's no right answer to distribution. To assist you consider the following questions in estate planning basics: selecting your heirs.
- Do you want to give to family? Which family members?
- Do you want to give to friends? Which friends?
- Do you want to give to charity? Which charities?
- How many beneficiaries do you want to add to the estate?
- Will the assets divide equally, by percentage, or by another basis (behavior, financial need, etc)?
- How much of the estate will be in a trust? What kind of trust do you want? Who is your trustee?
- How much will be given outright?
- How will personal property (house, car, jewelry, art, furniture, etc) divide?
- How will your insurance policies fit into the estate?
- What else do you want to add to the estate?
- Do you have a plan in place just in case the beneficiary is underage when he/she receives the inheritance?
- How are you going to handle taxes for the beneficiaries?
- How will you explain all of this to the chosen beneficiaries?
These are great questions to set up your estate. This is not the only time you should alter it. As life changes the policy should change. Examples include children, marriage, divorce and death of a beneficiary. Review the policy each year to see if you still feel comfortable with the decisions made. If you include a separate will to the policy, make sure the beneficiaries match on both documents. Otherwise, people listed on one and not the other will get a piece of the inheritance.
It's not enough to choose beneficiaries. You need to choose the right ones. Unfortunately you won't know how they'll react to the choices you made. This is something you can't take lightly, so come to us for estate planning. We advise you on how to handle future inheritance while you make the final decision. For more information on estate planning, contact us.