Beneficiary Designations in Miami
Utilizing Beneficiary Designations in Miami as a Part of your Estate Plan
Most people invest their personal wealth into financial accounts that might include a life insurance policy, annuity, retirement accounts, or college savings accounts. These accounts typically wield provisions that may dictate who receives the content of the account when you die. This is what professionals in the legal and financial fields call beneficiary designations.
When individuals possess financial accounts with beneficiary designations, these designations control how the accounts disperse when an individual dies. These stipulations supersede instructions in a will or trust, as well as if the law leaves the account to another individual.
An exception to this rule is when the deceased individual fails to complete this designation when the beneficiary passes away before receiving the inheritance, or if an individual names their estate as their beneficiary on the account.
For this reason, it is extremely important to consider beneficiary designations in Miami to ensure that the overall estate plan remains organized and coordinated. It is additionally important to note that beneficiary designations in Miami also represent a part of the estate for tax purposes. However, this does not extend under probate circumstances.
Advantages and Disadvantages Concerning Beneficiary Designations in Miami
Beneficiary Designations in Miami represent an excellent, easy alternative to transfer wealth to loved ones while avoiding the probate process. Upon an individual’s death, the contents of an account will pay directly to the designated beneficiaries, and bypass the probate process.
Nevertheless, when using beneficiary designations in Miami to transfer assets, individuals do forfeit an amount of overall control. They lose the ability to manipulate or influence how the beneficiary may utilize the assets in the account.
For example, a will may outline that specific funding is only available to help pay for college tuition concerning a loved one. However, with beneficiary designations in Miami, the loved one could potentially utilize the funds however they wanted.
Primary and Contingent Beneficiary Designations in Miami
In the vast majority of financial accounts, individuals can divide beneficiaries into two separate classifications called primary or contingent beneficiaries. The primary beneficiary wields the right to receive the account’s content when the individual dies. However, they lose this right if they pass away before receiving the inheritance. Under these circumstances, the contingent beneficiary becomes entitled to the account.
This extends to other overlapping classifications of beneficiaries called specific and general beneficiaries. These involve either naming a specific individual or group beneficiaries. However, naming a group beneficiary is sometimes a challenging endeavor.
Individuals must outline their wishes very specifically. For example, naming “children as the primary beneficiaries”. This could mean biological children, step-children, adopted children, or all the children. Furthermore, if the intended child passes away before the individual, does this extend to other children, or their descendants specifically?
Beneficiary Designations in Miami to Minor Children
Naming a child as a beneficiary can cause unwanted and unforeseen issues. Most financial companies will not pay out on death benefits to a minor. This is due to a child’s inability to accept payment legally. Under these circumstances, the financial company would hold the funds until a guardian establishes a specialized bank account. In the absence of a guardian, the court must appoint one before fund dispersement.
These procedures represent extremely time-consuming ordeals, as well as impart significant cost. In both scenarios, the child would receive the funds once they reach age 18, even if the child is not yet financially responsible for themselves.
Naming an Estate as the Beneficiary
Some people attempt to name their estate as the primary beneficiary. This can provide a number of benefits, however, the method also poses some problems. Naming an estate as the primary beneficiary of a financial account can ensure that the estate maintains funding to pay off debts and expenses. Unfortunately, this is also a downside as this does not prevent creditors from going after these accounts before they reach the inheritors.
Beneficiary Designations in Miami Attorneys from SchRamras & Diaz Family Law
Every person should take the time and care to ensure that their beneficiary designations coordinate with their overall estate plan. Without proper planning, many people go through a substantial expense and undertaking to set up an estate plan that the beneficiary designations inevitably circumvent altogether.
The best possible strategy is ensuring that the beneficiary designations work within the estate plan. This might involve designing and implementing a trust that holds assets for minors, naming the trust itself as the beneficiary.
Additionally, similar to maintaining and updating an estate plan, individuals should also review their beneficiary designations as well. It is common for life situations to transform over time. For this reason, the attorneys from SchRamras & Diaz Family Law recommend reviewing and modifying beneficiary designations in Miami every few years, as well as when a major life event occurs.
Individuals should consider beneficiary designations in Miami as a component in the big picture that is the overall estate plan. Every individual wields unique circumstances that prevent a “one-size-fits-all” approach.
Carefully review your beneficiary designations in Miami ensuring that the beneficiaries fit in line with the overall estate plan. Doing this can help avoid potential roadblocks and pitfalls concerning assets after death.
For more information concerning beneficiary designations in Miami, contact the caring and concerned estate planning attorneys from SchRamras & Diaz Family Law today to schedule a consultation. We can help you ensure protection and delivered intention for your assets after death.