Beneficiaries: What You Need To Know

When you make a will, one of the most important parts of the process is choosing your beneficiaries. If you do not choose a person, people, or an organization to be your beneficiaries, it is questionable what will happen to your estate once you pass away. This is an important decision that requires some special thought.

The beneficiaries of your estate will receive your assets based on your wishes outlined in your will. This includes money from bank accounts, retirement accounts, life insurance, property, and other assets. Here are some things you need to know about your will and your beneficiaries:

Who Should be Your Beneficiaries?

Your beneficiaries can be almost anyone you wish. A beneficiary is named in your will and will receive an inheritance from your estate. If you choose to have special requirements or specifications in your will, the beneficiary has to meet those obligations before any assets are dispersed. For example, if you want to leave your child money for their college tuition, you can stipulate that the money must be used for schooling.

If you do not have any individuals who you wish to name as beneficiaries of your estate, you can opt to leave your assets to your favorite charitable organization or non-profit.

Should You Ever Update Your Beneficiaries?

Any time you have a major change in your life, you should take some time to go over your will. You may want to change your beneficiaries based on your current life circumstances. You may get divorced and want to remove your ex-spouse from your will. If you get remarried, you need to decide if you want to add your new spouse as a beneficiary, as well as any step-children. You may have more children and need to add them as a beneficiary, too. If you plan to leave your estate to a charity and the charity goes under, you need to choose a new charity to leave your assets to.

If you do not check your will and beneficiaries from time to time, there can be significant issues once you pass away. You could be leaving your estate to someone who is no longer in your life and will not be able to carry out your wishes.

Creating a will is not a one-and-done process. You must go over your will periodically to make important changes as they occur. If you have any questions about your will or your beneficiaries, be sure to speak to a local will attorney.