Naming beneficiaries seems simple, but mistakes can lead to legal battles, tax issues, and unintended consequences. Here’s what you need to know to avoid common pitfalls:
- Failing to name a beneficiary or backup: This can send assets into probate, delaying access and reducing value.
- Not updating after life changes: Marriages, divorces, or births can leave outdated designations.
- Assuming wills override designations: Beneficiary forms take precedence over wills or trusts.
- Naming minors directly: This triggers court involvement and loss of control over inheritance.
- Overlooking special needs planning: Direct inheritance may disqualify individuals from government benefits.
- Ignoring tax consequences: Estate taxes and income taxes can erode value without proper planning.
- Skipping family discussions: Lack of communication leads to misunderstandings and disputes.
These mistakes can derail your estate plan. Regular reviews, legal advice, and open conversations help ensure your wishes are honored. [Read more…] about 7 Common Beneficiary Mistakes to Avoid