We see the following problems related to beneficiary designations: 1. Flat Wrong – the decedent forgot about or did not keep his/her beneficiary designations current and it is unlikely that the named designated beneficiary at death is the one he or she would have wanted. 2. Decedent Loses Control – assets passing by beneficiary designations pass outright to the beneficiary. The decedent has no control over the use of the proceeds. An inheritance can warm and comfort or it can burn and destroy. There are better techniques available to protect the beneficiaries and to assure that the decedent’s wishes are followed. 3. The Beneficiary Is Too Young. – naming an underage beneficiary will result in a court supervised conservatorship. This involves an initial inventory, a financial plan and annual inventories until the beneficiary is 21. Many feel that this is a costly and unnecessary process. 4. Old Enough but Too Young – many beneficiaries are old enough, but not able to effectively manage their finances. A solution to this is to use a trust to manage that beneficiary’s inheritance. This is particularly important if the beneficiary is a “special needs beneficiary” and might be disqualified from essential government programs should he or she receive an inheritance by beneficiary designation. 5. The Beneficiary is Too Old (or unable to manage) – sadly the elderly are vulnerable and elder abuse is all too common and often committed by family members or friends. For this reason it is often preferable to use a trust with a trusted family member as trustee or co-trustee to assure that beloved beneficiary is protected. In sum, effective planning involves coordinating your assets and the various methods of transfer and asset ownership to make sure that your wishes are followed. We help simplify this process through knowledge and experience.
We were very pleased with the level of expertise available at Davis Schilken. It enabled us to feel confident that we were presented all options. The process was efficient and allowed us to complete our estate planning effectively and efficiently.
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