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The importance of designations in estate planning

On Behalf of | Apr 19, 2024 | ESTATE PLANNING - Estate Administration & Probate

Estate planning involves complicated aspects that make individuals preparing for the future put their thinking caps on. There are, however, simple elements of estate planning that individuals often overlook because of how seemingly straightforward they are. These simple elements hold much more weight than people perceive them to have. This is the reality for estate planning designations.

Clear intentions

Designations in estate planning tools can help avoid disputes among your heirs and beneficiaries. When you clearly outline your intentions through designations, such as assigning will beneficiaries and power of attorney agents, it reduces the likelihood of misunderstandings and legal challenges during your estate’s administration.

Control over children’s care and future

In some cases, designations can include the appointment of guardians for minor children. If you have children, having a designated guardian ensures that your children are cared for by the people you trust most.

Potential to skip probate

Designations on assets, such as beneficiaries on insurance policies, retirement accounts and other financial instruments allow these assets to bypass the probate process, which can be time-consuming and expensive. Assets with designations generally transfer to the beneficiaries after the owner passes away.

Establishing contingencies

Certain estate planning tools allow you to designate primary and contingent beneficiaries. When you include clear designations in your estate plan, you have control as to who receives your assets in case your primary beneficiary is not able to inherit.

When estate planning, it is usually a good idea to consult with a legal representative knowledgeable in estate planning and administration and who can provide specific advice tailored to your situation. This guidance can also help you ensure that you are not missing anything crucial on your estate plan, including proper and clear designations.