Houston Estate Planning and Elder Law Attorney Blog
As you think through your estate plan, it is important to be thoughtful about your beneficiary designations, especially as they pertain to your life insurance policy, retirement plan, and financial accounts. What’s more, you should consider updating your beneficiary designations regularly, in order to make sure your estate plan reflects your current circumstances and wishes. On today’s blog, we cover some of the basics regarding beneficiary designations and how they relate to your estate plan.
What is a Beneficiary Designation?
In the legal world, a beneficiary designation is the act of naming an individual who will inherit any part of the designator’s estate. When the designator dies, that person’s assets then go to his or her named beneficiaries.
Why is Beneficiary Designation Important?
If you fail to name a beneficiary or beneficiaries in your estate plan, the state of Texas is left to divide your assets according to the laws of intestacy. These laws essentially dictate which members of the decedent’s family receive the estate. The order of intestacy does not always reflect the decedent’s wishes, and it makes it difficult for other family members and loved ones to contest the distribution of assets.
Naming beneficiaries is thus the best way to ensure that your wishes are honored after you are gone. For some accounts, such as life insurance plans and transfer on death accounts, beneficiary designations supersede the instructions in a person’s will.
When Should You Update Your Beneficiary Designations?
Life events that could trigger the update of a person’s beneficiary designation include: a death in the family, a separation or divorce, a remarriage, or the birth of any children or grandchildren. Even without these events, we recommend reviewing beneficiary designations every three to five years. If beneficiary designations become outdated, there is nothing that other possible beneficiaries can do to change the structure of the designator’s account. It is therefore crucial to ensure that your beneficiary designations are sufficiently up to date with your current life circumstances and your current desires.
We also recommend having honest and open conversations with your loved ones about your beneficiary designations. This minimizes the possibility of conflict down the line, and it helps make sure everyone is on the same page when the time comes for accounts to transfer ownership.
Do You Need a Houston Estate Planning Firm in Your Corner?
At McCulloch & Miller, we handle every aspect of the estate planning journey for our clients in the Houston community. Our decades of experience in the field make us uniquely equipped to handle every case, from ones that are simple and straightforward to others that are more complex and nuanced. If you are in need of a Houston estate planning firm that can proceed with your best interest in mind, McCulloch & Miller is the firm for you.
For a consultation with a Houston estate planning attorney from our firm, give us a call today at 713-903-7879. You can also fill out our online form with your contact information to have an attorney get back in touch with you as soon as possible to discuss next steps.