DIY Estate Planning: Select Your Beneficiary

This is the latest in a series of blog posts about doing your own estate plan.  

Before we get into the specific details, please note the following:

  • This blog post is for general informational purposes, and NowInsured is an insurance provider, not a law firm.  If you have specific legal questions, please approach an attorney.   
  • NowInsured has no stance for or against your particular approach on estate planning, whether you choose to hire an attorney or go with a do-it-yourself plan.  
  • NowInsured is not affiliated with any of the organizations identified in this blog post.  We will link to them as sources of information, but none of those links should be considered endorsements of any kind, and we are receiving no compensation in exchange for our links.  

Issues Around Naming Beneficiaries

As mentioned in our prior blog post, there are pros and cons with doing a will yourself.  In the same way, you can name your beneficiaries on your own, but you need to realize that there are potential problems with this.  

First, to reiterate from our last post: there are certain types of property that can’t be passed on in a will.  Here are a few examples from Consumer Reports:

  • If you own a house with your spouse, and your spouse has what is known as the right of survivorship in the house deed, he or she will get your share of the home when you pass away.  
  • If you have a savings or brokerage account that is payable on death, the bank gave you forms to fill out.  In those forms, you identified a beneficiary that would receive the money in those accounts once you die.  Those forms may override any beneficiary named in your will.  
  • Do you have a retirement account or life insurance policy?  They work the same way: they’ll pass on to whichever individual(s) you identify on their forms, not necessarily the people you name in your will.  

Forbes identified several other potential issues with naming beneficiaries.  Here are just a few:

  • Are you leaving cash gifts to particular people or organizations?  If so, you need to make sure that enough money will be available for the executor of your estate to pay those gifts.  
  • Be careful when naming a spouse as your beneficiary, particularly if you have a trust set up.  This can create problems if you have children from a previous marriage, or you don’t want your spouse to have full control over your assets after you pass away.  

Like we stated at the beginning of this blog post: we’re not taking a position for or against naming your beneficiaries on your own.  These are just some of the potential problems that can occur.  If you think you need guidance, talk to an attorney.

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