Missouri residents often give a lot of thought to creating estate planning documents, like wills and trusts. However, if they do not set up their beneficiary designations, other estate planning documents may be overridden, and a person named in a will may not receive assets designated to them. Additionally, there are certain assets, such as IRAs and retirement accounts, that are not necessarily covered by wills or trusts.
It is important that people make sure that their beneficiaries are named and updated as changes in their life occur. When someone purchases a life insurance policy or sets up a retirement account or an IRA, they will need to name beneficiaries. Failing to name a beneficiary can create problems since the assets have to be sent on to the estate’s administrator, which can delay a beneficiary from receiving the assets.
Therefore, it is easiest to simply name the person who someone would like to benefit from their life insurance policy or savings or retirement account. Alternatively, people can name a trust as a beneficiary, and assets can be passed on based on the language in the trust. However, it’s important to ensure that beneficiaries are kept up to date and take into account life changes such as a divorce or a remarriage.
Trusts can be an important part of an overall estate plan, and in many situations they can be preferable to a will. In addition to the fact that assets contained in a trust will in many cases be passed to a beneficiary upon the grantor’s death without having to go through probate, they can be structured in a manner so that distributions can be made over a period of time or upon the achievement by the beneficiary of certain milestones. An estate planning attorney can describe the legal requirements of a trust and assist in its creation.