Should I Name Alternative Beneficiaries in My Will?

From Our “Ask a Question” mailbag: “Should I Name Alternative Beneficiaries in my Will?”

Most recently updated on June 6th, 2018.

“I want all my things to pass to my daughter, but what if she dies before me? How do I make sure my things pass to my daughter’s children if she dies before me? Should I name alternative beneficiaries in my Will? I live in Philadelphia, and she does not, does that matter?”

Should I Name Alternative Beneficiaries in my Will?

While it is not a requirement, it is a good idea to name alternative beneficiaries in your will. The same is true for your beneficiary designation forms.

Have Your Estate Planning Attorney Review Your Beneficiary Designations.

Some assets pass outside your Will. These are known as “Non-Probate” assets.  These assets typically have beneficiary forms which you must correctly complete. Unfortunately, many times these forms are filled out quickly on the first day of employment. You might have made errors.

For assets with beneficiary forms, such as your IRA, life insurance and annuities, if the primary beneficiary does not survive you, then the asset pours into your probate estate and passes under your will. If you have no will the assets pass to your heirs by intestate succession. Triggering liquidation could cause unnecessary taxes, especially with your qualified plans (IRAs, 401k, TIAA-CREF, etc.). 

Work With Your Estate Planning Lawyer to Craft a Will.

For your will, if you name only one beneficiary and that person either dies before you or disclaims the gift, then your assets will pass by intestate succession to some family member. Given that you didn’t include these people in the will, you likely didn’t want them to inherit your assets. By naming a charity as alternative beneficiary, your assets can pass to an organization that you admire, rather than to a family member you do not.

In your case, you can name your daughter as the beneficiary, but we can craft your will to address what happens if she dies before you. We can say that if she is not living, your assets pass to her children. If they are minors, we can form trusts to hold this inheritance. You can decide who serves as trustee.  It likely makes no difference where your daughter lives, but we can review this with you.

Talk to your estate planning attorney about alternatives and make sure you avoid unnecessary taxes and that your assets end up with the people or organizations that you like.

More Planning Questions?

If you have more estate planning questions, please read my more detailed article, Estate Planning, Everything You Need to Know.

In Conclusion: Should I Name Alternative Beneficiaries in My Will.

In this article, I tried to answer the question, Should I Name Alternative Beneficiaries in My Will. Further, I included links to even more detailed information on my website. So, let me know how I did, comments and questions are welcome! I hope it helped! 

If you have more questions about wills and estate planning, let our Philadelphia County Estate Planning Lawyers help walk you through the confusing process.  Our lawyers are ready to answer your questions. Feel free to contact our office for a free consultation. 

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Tags: Estate Plan, Estate Planning Attorney, Estate Planning Lawyer, Pennsylvania, Peter Klenk, Philadelphia, Tatyana Gleyzer