Naming a Beneficiary: Designating a beneficiary should be a thoughtful and deliberate process, as naming the wrong person could create unintended consequences and a mess for your heirs. Beneficiary designations do not pass in accordance with the instructions in an individual’s will. Instead, the assets bypass the probate process and go directly to the beneficiaries. Avoiding probate can be appealing, however, as these designations override a will, they need to be carefully considered.
Issues to Consider: For a person creating a life insurance policy or retirement account, there are some issues to be considered before naming a beneficiary. First, the beneficiary should be financially responsible and able to handle potentially large sums of money. Second, a plan should be in place in case the named beneficiary is incapacitated or dies before you. Third, if the named beneficiary is still a minor when they inherit assets, the court may step in to appoint a guardian or conservator for the child. Fourth, if someone neglects to name a beneficiary, the non-retirement funds will typically flow into a person’s estate – which may or may not be what they wanted to happen with those assets.
Updating Your Designations: Just as important as naming an appropriate beneficiary, is making sure to review and update those beneficiary designations. The designations should be checked after major life events such as marriage, births, divorce, or death of loved ones. (Georgia law does not automatically revoke beneficiary designations upon divorce, as some states do.) Reviewing those designations and updating them based on your current status means that your wishes will be honored as you intended. It is also a good idea to keep a copy of all beneficiary forms, just in case your financial institution misplaces the paperwork.
For more information about beneficiary designations, and to further understand how Georgia law impacts the distribution of life insurance policies or retirement plans, visit the Law Offices of Sarah Siedentopf, LLC website AtlantaLegalRemedy.com or call us today at (404) 736 – 6066.
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