In Florida, one of the simplest ways to ensure someone receives your assets, is to name a specific person as a designated beneficiary on your accounts. By law, beneficiaries (individuals or institutions) you designate for an account will receive assets in that account upon your death (avoiding probate).
What type of accounts allow a beneficiary designation?
· Retirement Accounts
· Life Insurance policies
· Annuities
In South Florida, it is important to name both a primary beneficiary and contingent beneficiary. The contingent beneficiary will receive the assets if the primary beneficiary predeceases you.
What type of account does not include a beneficiary designation?
Brokerage accounts do not include beneficiary designations, but you can complete a Transfer on Death (TOD) agreement to designate how your assets should be distributed.
“It is important to review your beneficiary designation regularly, especially when there is a life changing event (marriage, divorce, birth of a child, or death of a spouse)”
You must complete a separate TOD agreement for each single or joint account you have. A TOD agreement assigns beneficiaries, which helps you avoid the costs, delays and publicity of probate. Without the designation assigned to the account, the account would be subject to probate.
It is important to review your beneficiary designation regularly, especially when there is a life changing event (marriage, divorce, birth of a child, or death of a spouse). If you do not update your account beneficiaries, your assets could be inherited by someone you no longer wish to receive (ie. ex-spouse)
Keep in mind beneficiary designations trump what ever is stated in a will or trust. However, the will or trust can help direct how the funds will be distributed to the intended beneficiary. For instance, you might have a child who you do not trust with money, the will or trust will give instructions on how the money will be distributed to the child over a period of time so they don't spend all the money at once.
If you live in Miami-Dade, Broward, or Palm Beach county contact an experienced estate-planning attorney at The Hershey Law Firm, in Fort Lauderdale, Florida, at (954) 303-9468 to discuss your estate planning needs. You can’t predict the future, but you can plan for it.