What are Beneficiaries?

Beneficiaries are the individuals to whom you want to distribute your assets. Essential to every estate plan, beneficiaries can reap the benefits of your bank accounts, life insurance, or retirement accounts. Choosing which beneficiaries to name is a delicate process that requires careful consideration and adequate time to make such a significant decision. Our estate planning lawyers at Mette Attorneys at Law can discuss what considerations you should make when choosing beneficiaries.

Accounts That Often Require a Beneficiary

You will need to choose a beneficiary for your most important assets, including:

• Retirement accounts: Traditional IRAs, Roth IRAs, 401(k)s, and 403(b)s
• Stocks and brokerage accounts: These accounts may have a transfer on death (TOD) designation, allowing the transfer to avoid probate
• Bank accounts and certificates of deposit (CDs): By designating a beneficiary on each of your accounts, you will allow the funds to pass to them and avoid probate
• Life insurance: The death benefit is intended to provide financial assistance to family members following your passing

Why is It Important to Name Beneficiaries on Individual Assets?

Deciding who should receive each type of asset can be a daunting task. While some people may decide to have their surviving spouse inherit the majority of assets, others may choose to distribute them to loved ones who require financial assistance. If you do not have a will, then these assets will pass according to the laws of intestate succession. The order of succession varies from state to state. Pennsylvania designates that the estate be distributed first to the surviving spouse, then children, then to the deceased’s parents, to siblings or their children, and to extended family.

If any of your assets do not have a named beneficiary and you have a will, then these assets will pass through probate upon your death. Probate is an expensive process that involves the court intervening to distribute your assets. Besides the cost, going through probate will place more work on your personal representative (the person you appointed in your will to handle your estate). By taking the time now to name beneficiaries, you could save your loved ones from a great deal of stress later on.

Considerations in Choosing Beneficiaries

While most individuals choose to name their spouse or partner, adult children, or close friends as beneficiaries, specific considerations should be taken into account. In making these decisions, you will want to think about the following:

• The strength of your relationship with each of your loved ones
• If any of your family members or close friends need financial support
• How each of your family members or close friends handles money (you likely do not want to convey a significant asset to a spendthrift)
• If there are any charities or organizations you would like to support
• Giving money to one of your family members or close friends could create tension between them and others.

Making these decisions can be stressful, but thankfully, our Harrisburg estate planning attorneys have assisted others and are happy to help you. Whether you are interested in formulating a complete estate plan or appointing beneficiaries for individual assets, our legal team is ready to assist you.

Speak with Our Harrisburg Estate Planning Lawyers Today

Appointing beneficiaries can be a tedious process. Many factors should be taken into consideration before choosing a beneficiary, making your decision difficult. At Mette Attorneys at Law, our Harrisburg estate planning attorneys are prepared to simplify the process to help you make informed decisions. To learn more or schedule a confidential consultation, contact us online or call (717) 232-5000 today.