The answer to this is a resounding, “YES!” Naming only one beneficiary is never a good idea because doing so leaves our estates vulnerable to being distributed in a way we do not intend. Unless we are expected to die within a short amount of time, naming a secondary beneficiary is essential.
What is a secondary beneficiary? Often called a contingent beneficiary, a secondary beneficiary is a person or entity who is entitled to receive estate assets if the primary beneficiary is unable or unwilling to accept the assets. Secondary beneficiaries can be just about anyone we desire them to be – people, charities, trusts, etc.
What happens if I don’t have a secondary beneficiary?
If your primary beneficiary predeceases you or otherwise does not accept the assets of your estate and you have not named a secondary beneficiary, your estate planning will have been in vain. The laws of the Great State of Texas, under a process called intestate succession, will govern how your estate is distributed. The laws are designed so that our closest kin receive our assets. Stepchildren, parents, spouses, and other loved ones are often left out or inherit much less than we intend. To ensure that our wishes are carried out to the fullest extent, naming a secondary beneficiary (and several more alternate beneficiaries) is important.
Who can I name as a secondary beneficiary in my estate, will or trust?
The answer is that it’s your property and your plan. You can name whomever you like as a secondary beneficiary or any other beneficiary. We urge you to name as many contingent beneficiaries as will assure you that your estate will pass to someone you love or an organization you wish to support. Our job is to listen to you and create an estate plan that meets your needs and honors your wishes.
Questions? We are here to help.
Simply thinking of creating an estate plan seems daunting to many people. They believe that they must have their whole lives organized before seeing an attorney. The truth is that seeing an attorney and answering questions about your family and your finances is enough for the attorney to help you create a plan. Remember, planning is not only about your assets but also about your wellbeing should you become unable to make your own decisions. Contact us to learn how we can help you create a plan tailor made to suit your needs.