On behalf of Law Offices of Frye, Fortich & Garcia, P.L. | July 25, 2022 | Estate Planning
You’re not alone; many Florida residents tend to put off their estate planning. It may be an uncomfortable decision for some, or others could be too busy with their lives to bother. For most of us, it’s easier just to say we’ll do it later.
But naming your beneficiaries is a crucial step in proper estate administration. By ignoring or failing to think through these important decisions, you could be making a mistake that might cost your loved ones dearly.
What You Should Do
First, use a good attorney to draft a will and execute it in the attorney’s office, with witnesses as to your competency and intentions. The attorney will take the time necessary to understand your desires, and think strategically about how to make those a reality.
If there is a possible heir that you do not want to include, it is important to specify that, in writing. Do NOT leave them a nominal gift, because then they must be notified of every action in your estate, and they could choose to tie up and cause delay to your estate could be tied up in probate for months or years after your death, and even subject your estate to additional attorney’s fees and to court fees.
Naming beneficiaries for your insurance policies, bank accounts, investment accounts, IRA or 401(k) accounts can be seen as even more important than planning your will or trust. Accounts with Payable-on-Death (“POD”) or Transfer-on-Death (“TOD”) beneficiary designations are distributed by the financial institution directly to any such beneficiaries outside of any probate administration and without any court involvement. Without beneficiary designations, the money due to your heirs may be difficult to be dispersed.
Make sure you think through whether your designated beneficiaries for your accounts can make sound decisions on their inheritance. If a loved one who is known for making irresponsible financial decisions suddenly receives a windfall inheritance, the outcome may not be one you would desire. However, the judicious use of trusts in your estate planning can guide how and when the assets are to be spent by the beneficiaries.
Finally, it’s important to review beneficiaries after any major life events, such as a marriage, divorce, birth, or death of a loved one. Beneficiary decisions that seemed sound years ago may have changed and might need important revisions to either add an heir to your estate or to prevent someone from receiving a part of it. Additionally, it is good practice to check from time to time simply to make sure the beneficiary you believe is on file for any particular account is actually beneficiary designated on such an account. It is not uncommon for beneficiary designations to go missing when financial institutions merge.
Contact an Experienced Estate Planning Law Firm
For answers to any questions regarding naming beneficiaries or on any other estate planning matter contact an experienced attorney in estate and estate administration matters. The attorneys at Frye, Fortich & Garcia, P.L. have such experience and are ready to take your call 305-931-3200
