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Avoid making these beneficiary designation mistakes

On Behalf of | May 31, 2022 | Estate Planning |

Estate planning is something that every California adult should do to safeguard their assets and protect their family’s future. You should avoid making these beneficiary designation mistakes.

Forgetting to name beneficiaries

It’s a big mistake to forget to name beneficiaries in your estate planning documents. They should be named in your will, trusts and life insurance, investment and retirement policies. Don’t assume that the court will assume your beneficiaries because someone important might miss out on an inheritance.

Failing to name alternate beneficiaries

You might want to leave a specific asset or property solely to one beneficiary. While that’s fine in practice, it’s not the best move. If you end up outliving that person, you won’t be able to leave them what you intended. Always name alternative beneficiaries in the event that your first choice dies before you.

Update your beneficiaries

Circumstances in life can change without notice. As a result, if you neglect to update your beneficiaries, the wrong person might end up inheriting something that’s inappropriate. A person might suddenly change their mind about being a beneficiary. You need to periodically update whenever anything changes in life. Things like divorce, remarriage, birth, death and blended families make it important to update beneficiaries in your estate plan.

Naming your estate as a beneficiary

Naming your estate as a beneficiary is a mistake. When you do this, it means that assets normally exempt from probate may suddenly become subject to probate.

Naming the wrong beneficiary

Mistakes happen. You could end up naming the wrong beneficiary. This could happen to anyone. Someone might have a name change that you overlooked. For example, a family member just got married and took their spouse’s name or you have a relative who just came out as transgender and changed their first name. Always be careful and thorough.