Secondary beneficiaries may save your estate plan.
Having backups in place is a wise move.
It is helpful both personally and professionally.
Backing up the hard drive on your computer can protect important information or projects from being destroyed.
Syncing your phone to the cloud can prevent sentimental photos from being lost forever.
According to a recent yahoo! Life article titled “What You Need to Know About Secondary or Contingent Beneficiaries,” technology is not the only realm where having a backup is important.
It is also important in estate planning.
Beneficiaries are named in trusts, last wills, life insurance policies, retirement accounts, and other assets.
After the death of the original owner, these assets are distributed to the beneficiaries as designated.
A primary beneficiary has the first claim to the designated assets.
However, sometimes the primary beneficiary does not want to inherit or is unable to inherit due to their own death or incapacity.
Such instances make it essential to have secondary beneficiaries.
A secondary beneficiary is also known as a contingent beneficiary or a remainderman.
You can even designate more than one secondary beneficiary.
Furthermore, secondary beneficiaries can inherit a designated percentage of an asset, a specified dollar amount, or event the whole enchilada.
It can even be helpful to name tertiary beneficiaries if the secondary beneficiaries are unwilling or unable to inherit.
In family estate planning, it is common for a spouse to be listed as the primary beneficiary.
Children are often listed as the secondary beneficiaries.
Tertiary beneficiaries are often more distant relatives or charities.
Some assets directly pass to those listed as beneficiaries without first being required to pass through probate.
When no secondary beneficiaries are named, you can run the risk of these assets being included in your probate estate.
By having a secondary beneficiary, you may avoid intestate succession if your primary beneficiaries are no longer alive.
By naming secondary beneficiaries on your accounts and in estate planning documents, you can retain control over who will inherit even if your original wishes cannot be fulfilled.
Work with an experienced estate planning attorney to create a plan to meet your needs no matter what life throws your way.
Reference: yahoo! life (Jan. 4, 2023) “What You Need to Know About Secondary or Contingent Beneficiaries”