Creating an estate plan involves selecting people to receive your money, property, or other items if you pass away.
When making a will, you’ll work with an estate planner to designate those who will inherit from you. The persons (or entities, such as a charity) you choose are the beneficiaries of your will. In most cases, you’ll choose multiple beneficiaries, such as when you set up a more complex estate planning tool, like a trust.
In addition to executing a will, you may select beneficiaries for other types of assets you own. You may have an insurance policy or retirement account, investment account, or another pay-on-death (POD) account. You’ll typically want to select loved ones to receive the funds from these kinds of accounts upon your death. For instance, purchasing a life insurance policy involves choosing someone who will receive death benefits if you die.
These decisions inform your overall estate plan. Whether in the context of a will, trust, POD account, or life insurance policy, the people you pick to receive your assets are known as beneficiaries. They receive the “benefit” of your assets.
Tell me more about primary vs. contingent beneficiaries.
If you have questions or would like more information about setting up an estate plan, give us a call at (605) 275-5665.