Do Not Overlook These Key Beneficiary Designations

In January 2008 director and Academy Award winning actor and Heath Ledger passed away at the age of 28. Unlike the majority of young adults, the actor did have a will, but he failed to update beneficiary designations after the birth of his only child in 2005. While Ledger’s family did eventually gift the estate to his young daughter, their actions are not as common as one would hope. Often a failure to update beneficiaries leads to expensive legal battles that may end in disappointment for the excluded spouse or child. Overlooking key beneficiary designations in your own estate plan could leave your family bereft and without access to crucial assets that you would have liked for them to have.

Commonly Overlooked Designations

Many adults who are attempting to create an estate plan focus on life insurance policies and real property. Bequeathing these key assets becomes a priority and other designations are overlooked.  Beneficiary designations that are often never updated or forgotten entirely are:

  • United States Saving Bonds
  • Securities (stocks and mutual funds)
  • Bank Accounts
  • Certificates of Deposit

Each account type gives the owner the option of naming a beneficiary so that the account could be transferred on death or payable on death to the named beneficiary. Account holders have the option of naming individuals, the estate itself, charities, and specific groups (future grandchildren).

What Happens When No Beneficiary is Named?

The consequences of failing to designate a beneficiary vary and each potential scenario leads to stress for your loved ones when they are already extremely vulnerable. One of the best case scenarios for a person with an existing estate plan who did not name beneficiaries on certain accounts is the estate becoming tied up in probate. In the worst case, your heirs could find themselves in litigation with each other or third-parties who feel that they were disinherited by accident or who believe they are entitled to a share of your estate.

Does Beneficiary Designation Really Matter?

A person with few assets and fewer heirs may not believe that naming a beneficiary is important, given his or her lack of property. Remember, even a small amount of money or property can make a large difference to your grieving loved ones. Having to wait for the estate administrator to distribute funds could cause unforeseen hardship to those closest to you. Naming family members or friends as beneficiaries means that those assets will bypass the traditional probate process so that your intended heirs can receive their funds quickly.

Get Expert Advice

Estate planning is stressful, complicated, and often time-consuming, but fortunately, it is not something that you have to do alone. An estate planning attorney can provide you with the legal advice you need based on their years of professional experience. The team at MMZ Law understand that every legacy is unique and we work with you to create a plan that is tailored to your needs. With a conveniently located Claremont, California office we are available to provide the assistance you need to contact us today to schedule an initial consultation.

BROUGHT TO YOU BY:

MMZ LAW, A PROFESSIONAL CORPORATION

341 W. 1st St. Suite 100
Claremont, CA 91711

MARIVEL M. ZIALCITA is the founder of MMZ LAW, A Professional Corporation, where she practices in the areas of Elder Law – Medi-Cal Planning Asset Protection, Trust & Estate, Special Needs, Conservatorship, Trust Administration, & Probate. Ms. Zialcita is a frequent speaker on trust and estate matters and holds memberships in the State Bar of California, Trust and Estate Section, The San Bernardino County Bar Association, Wealth Counsel and Elder Counsel. She currently assists in the pro bono legal services program at the James L. Brulte Senior Center in Rancho Cucamonga, California. She is based in Claremont but assists clients throughout Southern California.

This information is educational information only and not legal advice.

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Taking the right steps now will help you build up your legacy and allow you to live it for many years to come. Here at MMZ Law, we help clients throughout California with a wide range of estate planning services to help you prepare for whatever life throws your way so your assets will be protected.