The Importance of Proper Beneficiary Designation – Portland, Oregon

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The lawyers with the Law Offices of Nay & Friedenberg explain why naming proper beneficiaries in an estate plan is so important.

Many assets—including life insurance, IRAs, annuities, and pension benefits (such as 401(k)s and Keogh plans)—let you list someone as a “beneficiary.” A beneficiary automatically receives the asset when you die.  Listing your estate as the beneficiary is almost sure to require probate. If you want to avoid having these assets go through probate, it is best to name specific persons or entities as beneficiaries. There are some instances, however, where you may wish to name your “estate” or a trust as beneficiary. The most common include when your will has a trust with tax savings clauses or a trust for the support of minors or disabled beneficiaries. Your lawyer can advise you on this.

Often you can name a primary and several alternate beneficiaries. It is important to list alternate beneficiaries. If a designated primary beneficiary dies before the owner and no alternate beneficiary is named, the asset will end up in your estate and will possibly put it into a probate. Check all beneficiary designations on your assets to be sure alternates are listed and also be sure the people listed are the ones you want.

Please note that there may be tax consequences regarding who or what entity you name as a beneficiary of tax-deferred assets such as IRAs, annuities, and pension benefits. It is particularly important to obtain good legal advice regarding who should be named as a beneficiary of your IRA. Make sure you know what would happen to any money left in an annuity when either the owner or the person named as the annuitant dies.

Having a custom estate plan in place is very important because we all have different needs. Getting an experienced Estate Planning Attorney involved can give you the direction you need to put your family at ease. Contact the estate planning attorneys with the Law Offices of Nay & Friedenberg in Portland, Oregon at (503) 245-0894 to set an appointment.