When it comes to planning for the future, one important aspect to consider is who will receive your assets and possessions after you pass away. People call these individuals or business entities your beneficiaries.
Selecting beneficiaries is a decision that requires careful thought. There are specific factors to consider when making this choice for your will.
Closeness of relationships
Start by thinking about the people who are closest to you and who have played significant roles in your life. These might include family members such as spouses, children and grandchildren, as well as close friends or charitable organizations that are close to your heart.
Financial needs
Federal estate taxes only apply to inheritances that are above $12.96 million, so you may not have to worry about them when giving your loved ones your assets. However, you should still reflect on the financial needs of your potential beneficiaries.
Are there individuals who rely on your support for their livelihood or education? Consider how your assets can best serve their needs and goals.
Age and maturity
If your beneficiaries are minors, you will need to pick a trusted adult to manage their inheritance until they reach a certain age. Think about whether this responsibility falls to a guardian or a financial institution.
Unique situations
While you may assume you should divide your assets equally among beneficiaries, consider the differences in your loved ones’ lives. Individual needs and situations vary, so distributing your assets in a fair manner might involve looking closer at each beneficiary’s experiences.
Choosing beneficiaries is a significant decision that requires thoughtful planning. Taking the time to make well-informed choices now can provide peace of mind for you and your loved ones in the future.