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How to Correctly Set Up BeneficiariesIn our estate planning practice, we many times work with clients who have questions regarding their beneficiaries, and there can also be confusion as to how your will or trust will intersect with your beneficiary designations. In our free estate planning consultations, we go over these questions and help to ensure that our clients have an overall comprehensive estate plan. It’s important to understand that your will or trust will not control any asset which has a beneficiary designation. This means that whoever you have listed as the beneficiary of an asset is who will receive the asset upon your passing, regardless of what your will or trust states. Here are some important things to keep in mind when it comes to beneficiaries:
- Ensure they are up to date. After certain life events occur (for example: marriage, newborn child, death, or divorce), people may not always keep their beneficiary designations in mind. However, doing so is very important to ensure that they accurately reflect your wishes.
- Name a secondary beneficiary. While most people will list their spouse or children as the primary beneficiary, many times, the secondary beneficiary will remain blank in the paperwork. It is very important to consider who you may want to inherit an asset in the event your primary beneficiary predeceases you.
- Don’t name a child who is a minor. In Washington State, a minor is not competent to receive an inheritance. If you would like to leave something to a minor, you’ll want to ensure that you work with an attorney who can assist you in properly setting up that inheritance.
- Naming a beneficiary other than your spouse. Washington is a community property state, meaning that most assets acquired during the marriage are presumed to be owned by the marital community. And while a person can name any person as a beneficiary of an asset, in Washington, or any other community property state, a spouse must sign a waiver if the beneficiary of an asset is to be someone other than your spouse.
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