Beneficiary Designations can be an effective estate planning tool in limited circumstances. Beneficiary designations work by having an asset transferred directly to the named beneficiary upon your death. Sometimes these beneficiary designations take the form of an account with the designation “POD – Payable on Death” or “TOD – Transfer on Death.” Although beneficiary designations can avoid probate, consideration should be given to the following:
1. Not all assets can be titled with a beneficiary designation (i.e., cars, jewelry, home furnishings).
2. If you change your mind about a beneficiary designation, you will need to change it for each asset, which can be tedious if you have numerous TOD or POD accounts.
3. Leaving an asset to a minor child using a beneficiary designation may require a court guardianship be established to hold the asset for the minor’s benefit until they turn 18. This could be cost prohibitive.
4. If your beneficiary designation dies before you, the inheritance could “lapse” and the share will go to your estate, which may not provide for that beneficiary.
5. Leaving assets outright to disabled individuals using a beneficiary designation could disqualify them from vital public benefits.
How we can help.
Attorneys Sierra Butler and Melissa Casanueva handle estate planning matters as part of their elder law practice. If you would like more information regarding how Butler Elder Law can help you, please contact us at (941) 254-6611. If we are not able to assist you, we will refer you to another lawyer or legal service who may be able to assist you.
This information sheet has been designed by Butler Elder Law, P.A. for general information only and is not, nor is it intended to be, legal advice. The hiring of a lawyer is an important decision that should not be based solely upon advertisements.