Wanting to leave assets to loved ones as part of an estate plan can be a sentimental and wise step. You may get a warm feeling knowing that your loved ones will obtain something from you after your passing whether it is money or personal items. Naming beneficiaries can also ensure that the distribution of those assets takes place more quickly and easily.
Of course, that quickness and ease depend on the accuracy of your beneficiary designations. You may find it somewhat insulting to think that you cannot put a person's name down correctly on a beneficiary designation form, but really, mistakes with these designations are not uncommon.
A variety of mistakes
Errors with beneficiary designations could come in a number of ways. Some mistakes could occur due to the following:
- No beneficiary: You may not think that a certain account or asset could have a designated beneficiary, or you may simply forget to add one. If so, a payable-on-death account could pass into the estate instead of directly to a desired person.
- Not reviewing beneficiaries: Even if you do take the time to name beneficiaries early, your circumstances and the circumstances of others may change over time. As a result, if you do not periodically review and update your beneficiaries, an outdated designation could cause trouble.
- Incorrectly naming a beneficiary: You also run the risk of incorrectly making a designation. You may have multiple loved ones with the same name, but if you do not designate John Smith, Sr., or John Smith, Jr., your estate could face problems.
- Directly naming a special-needs beneficiary: Individuals with special needs or other extenuating circumstances may suffer more harm than good from you directly naming them as beneficiaries. Instead, you may wish to find alternate ways to ensure that a loved one obtains the assets.
Unfortunately, the potential mistakes do not end there, so it pays to name beneficiaries carefully.
Of course, you could lessen your likelihood of making mistakes when naming your beneficiaries by having professional help. An experienced Florida attorney could review your payable-on-death accounts, explore your other assets and ensure that each has the appropriate beneficiary designation. Having this assistance may prove invaluable not only to you but also to your family members who will have the responsibility of settling your final affairs when the time comes.