The main goal of estate planning is to hand off your estate based on your wishes, including who you want your assets to go to. Without designating beneficiaries, your estate will be left in the air. Your loved ones may be unable to find out how to access your assets or go through court to inherit them. To ease this burden on your family and friends you can designate your chosen beneficiaries in your will. But who should inherit your wealth?
Ultimately, who you choose to inherit your estate is up to you. However, there are several aspects to consider when choosing your beneficiaries.
Are You Married?
Typically when one spouse passes away, any jointly owned assets are now fully owned by the surviving spouse. This is known as “jointly with rights of survivorship.” If you have individually owned assets that do not have rights of survivorship clauses, the assets would have to be left for the spouse to inherit through your will.
However, you should add second beneficiaries of your assets if something were to happen to your spouse.
If you are divorced, be sure you have updated your beneficiary information to reflect your wishes.
Do You Have Children?
If you have only one child, you can leave all of your assets to your child if that is your wish. However, if you have multiple children, deciding on how to divide up your assets amongst them can get tricky. While you could divide up your assets equally for each child, that may not be an equitable choice.
You can divide your assets equally if you want to go with the most fair option, it is the best option based on your children’s current financial situation & the support you have given them throughout your life, or preventing the contesting of the will.
A few reasons you may want to divide your assets equitably for your children are if you have financially supported one child more than others, some children need more support than others, one of your children has disabilities or special needs, or you want to leave more to your biological children than your stepchildren.
No matter how you decide to divide up your assets, discuss your choices with your children beforehand. This will give you the opportunity to be transparent as you want to with your reasoning and prevent your children from feeling blindsided.
Are There Other Important People In Your Life?
You may have close extended family members or friends that you want to leave some of your wealth to. Some ideas are leaving behind a specific item that you own, a certain dollar amount, or a percentage of your estate.
If you have pets that you want to make sure are taken care of after you pass, you can write them into your will. Similar to a power of attorney, you need to designate a caregiver for your pet after discussing your thoughts with the potential caregiver. You can also leave a cash gift to finance the care and supplies needed to care for your pet after you pass.
Deciding on your beneficiaries can be a difficult aspect of estate planning. To make the process easier, have an advisor from Mooney Lyons Financial by your side. Our advisors will help guide you through the estate planning process and ensure your wishes are reflected in your will. Schedule a consultation with us today to get started.