All Louisiana residents can benefit from estate planning to leave assets to their loved ones. At the very least, it’s wise to create a will, a trust, and appoint someone as your power of attorney to prepare for the future. It’s also crucial to pay attention to your beneficiary designations; these tips can help.
Name beneficiaries
Estate planning requires naming beneficiaries you wish to receive an inheritance. This could be your spouse or children; however, if you’re single without children, you can name your parents, siblings, other relatives or even a friend.
Name a contingent beneficiary
Most people automatically choose one person as the beneficiary to their financial accounts; however, life is often unpredictable, so it’s a good idea to name a contingent beneficiary. This secondary beneficiary can receive your assets if your primary one passes away prematurely. It’s a safeguard for a “just in case” situation.
Update for major life events
Updating your beneficiary designations is necessary whenever a major life event occurs. This includes marriage, divorce, remarriage, the birth or adoption of a child and death. You may also want to change your beneficiaries if you are suddenly diagnosed with a serious health condition.
Don’t name your estate
Sometimes, it might be tempting to name your estate as a beneficiary on one of your financial accounts. It’s better to avoid doing that because it could result in the account going through probate instead of directly to a person. This also carries other consequences; your financial account might be subject to hefty taxes, which could burden your survivors.
Disinheritance
If you have a falling out with a close family member and want to disinherit them, you’ll have to remove them as a beneficiary. The same applies if someone decides they don’t want to receive assets from you for any other reason. Or you may have an estranged relative you’re unable to locate; you may want to replace them with another beneficiary you have regular contact with.
Often, people disregard the importance of beneficiary designations. Paying close attention to them can lessen the burden on your loved ones.