As you prepare your Will and estate plan, you will choose beneficiaries to receive your financial and personal assets. What happens if a beneficiary dies before you do? If you pass away before updating your Will to reflect the beneficiary’s death, how will your assets be divided?
When you create or update your Will with a North Carolina estate planning attorney, discuss choosing not only primary, but also secondary beneficiaries for each of your assets. Establishing these contingencies will help prevent conflicts when loved ones are settling your estate after you’re gone. It will also ensure your wishes are carried out and family members receive the inheritance you have chosen for them.
If you have not selected a secondary beneficiary, review your Will for contingency provisions. There may be language that directs the gift to the beneficiary’s descendants as alternate beneficiaries if your originally selected beneficiary has already passed away. In these situations, any children of the beneficiary become the default beneficiaries and assets are divided equally among them.
One of the many problems with Do-It-Yourself Wills is that they don’t fully address complicated issues like this. Individuals who opt to use a DIY Will are often choosing to do so in order to save money and cut down on their personal estate planning costs. However, they are unknowingly creating expensive problems that could cause conflict during estate administration. Surviving family members may contest the Will if contingencies are not clearly addressed.
Meet with a North Carolina estate planning attorney to make sure your Will includes appropriate language to reflect what you want to happen in the event a beneficiary passes away before you. You can make decisions now that will give you the flexibility of designating your assets to an alternate person or charity. Your Will is not the only place where you will need to create or update contingent beneficiaries. Learn about why it is even more important to update your IRA beneficiary designations here.