Beneficiary Designation: It’s Important to Get It Right
One of the most common mistakes that we as Florida estate planning attorneys see is incorrect beneficiary designation. This is at the root of many unintended consequences that often lead to legendary family disputes.
An area where you need to be sure you get it right is for beneficiaries of qualified plans. Qualified plans include IRAs, life insurance policies, annuities, 401(k)s and any other plan that qualifies for income tax benefits. You need to be sure you have the proper beneficiary designations in place so these assets go where you intended.
For example, if you leave assets to your “living children” and one of your children pre-deceases you, their children will be cut out of any inheritance that may have eventually come to them through the deceased parent. Most people would want the grandchildren to benefit, so the language must be very specific.
In addition, if you name your children as beneficiaries and they have not reached legal age to own those assets at the time you die and you have not named a guardian, the assets would then have to be administered by a court-appointed guardian, which is an expensive process and may not follow your wishes. The solution would be to set up a trust, naming a trustee to take over until the children are at the age you designate to receive their inheritance.
For more information on beneficiary designation and Florida estate planning, contact our Jacksonville Florida estate planning law firm.
