Estate Planning Attorneys in Las Vegas: Naming Estate Beneficiaries
Estate planning attorneys in Las Vegas field questions from every corner of the industry. Beneficiaries remain among the most common topics of discussion with our clients. Since it is such an important concept, understanding their mechanisms will be crucial. Otherwise, you’ll have limited knowledge regarding how your assets would be disbursed.
Estate Planning Attorneys in Las Vegas: What Is a Beneficiary?
So, if you have been planning for retirement wisely, you’ll have a few accounts full of assets. When planning for how those should be handled, you must consider who should receive them. Those people should be your beneficiaries. In other words, you should name them as the legal inheritors of such assets. That way, when the time comes, everything goes where it should.
By Naming a Beneficiary, You’ll Avoid a Lot of Potential Fees
Plus, on top of that peace of mind, you’ll also avoid a ton of fees. When you don’t name a beneficiary, assets pass through a number of 3rd parties before they disburse. As a result, your inheritors must pay a fee for each of those steps. By naming them ahead of time, you avoid most of those costs.
Primary vs. Contingent Beneficiary
Depending on the circumstances, you may want to name them contingent beneficiaries. Thus, only giving them access to your assets should certain circumstances be met. Otherwise, everything would remain under your control. In contrast, you are the primary beneficiary for most of your retirement accounts. Assuming you live to retirement, then those funds would belong to you. With a contingency, you avoid any unnecessary transfers. That way, these things only come into the picture when they are needed.
Benefits of Naming a Beneficiary to Your Retirement Estate
What would make someone name a beneficiary? If your assets go to your relatives either way, what are the benefits? Well, if you would like to minimize the fees and taxes, there’s nothing more effective. By naming beneficiaries, your inheritors save a ton. Since you eliminate a lot of legal processing, it’s much more affordable in the long run.
Guaranteed Funds for the Future
By setting up one of these, you provide a security net. In the future, when your inheritors receive their funds, they’ll appreciate the difference. Plus, by doing it this way, you ensure the funds don’t reach them too early. That way, they are old enough to appreciate such a large sum. Otherwise, wasting the funds would be a much larger risk.
A Few Potential Disadvantages
To complete this process, you’ll have to navigate some legalities. As a result, we recommend working with experienced estate planning attorneys in Las Vegas. When it comes to your retirement assets, you don’t want to leave things up to fate. If you can avoid it, you’ll appreciate such certainty. However, at the same time, this does place a few restrictions on you. Since these are legal contracts, once they are in place, overturning them can be a chore.
Comparing Types of Beneficiaries
In general, beneficiaries belong to one of two groups. On the one hand, they can be the primary beneficiaries. On the other hand, they can be the contingent beneficiaries. Each of these groups is important to understand. Unless you are familiar with them, it is worthwhile information.
Generally speaking, the primary beneficiary should be the account holder. For example, suppose you have an IRA. With one of those, once you reach retirement, the funds belong to you. As such, you would be the primary beneficiary. According to estate planning attorneys in Las Vegas, unless you transfer ownership of those assets, you’ll remain the primary beneficiary until the funds are gone.
When planning for an inheritance, you can name a contingent beneficiary. These contracts specify which circumstances would grant individual access to the assets. Suppose you would like to set aside some money for one of your children. If that happens to be the case, you would name them as a contingent beneficiary to one of your retirement accounts. That way, if something transpired, they would receive them. At the same time, your assets continue to belong to you unless something happens. That way, your relatives have a sense of financial security. Plus, you’ll give it to them without giving anything away unnecessarily.
Naming Beneficiaries to a Trust
Naming a beneficiary to trust is similar. However, there a few key differences. Compared to an IRA, these would be much more involved. Unless you have a substantial sum of assets, the extra work may not be worthwhile. Nevertheless, under certain circumstances, these make more sense than anything else. Thus, if you’d like more information, we suggest pursuing it. By speaking with a professional, you’ll receive better guidance pertaining to your situation. That way, while you plan for the future, you’ll have all the needed knowledge.
Trusts vs. Other Forms of Inheritance
When you set up a trust, you are initiating a complex legal procedure. With other forms of inheritance, things are not as complicated. One consequence would be the higher costs that accompany trusts. Since they tend to be a bit more expensive, they are not suitable for all financial situations. In many instances, you’ll lose money in the run by using one of these. Fortunately, those same funds could be applied to an IRA. With one of those, you’ll prevent most of the fees. In this way, your retirement plans will be a bit more efficient. Plus, on top of that, you won’t have to worry about all the legalities of a trust.