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An overview of beneficiary designations

On Behalf of | Aug 2, 2022 | Estate Planning |

Assets held in your Maryland estate may be subject to state probate laws. However, attaching a beneficiary designation to eligible items may make it easier to settle your affairs without the need to create a trust. A beneficiary may be any person who has reached the age of majority and is otherwise legally able to own or manage the property.

Beneficiary designations trump a will

A beneficiary designation is generally seen as superior to what is written in your will. Therefore, it is important to review any that you have made after a major life event such as a birth, death or divorce. It may also be a good idea to schedule routine estate planning sessions on an annual basis.

If your primary beneficiary is unable to accept an asset, it will likely revert back to your estate if alternate designations are not made. The same may be true if you fail to name a custodian to manage assets on behalf of a minor beneficiary.

What happens after you pass?

When you pass, assets typically transfer almost automatically to whoever is named on a beneficiary designation document. Whoever is set to inherit a home, bank account or other property will generally need to do little more than confirm that you have passed. This is generally done by presenting a copy of your death certificate to the financial institution that services an account or to the entity responsible for managing deed or title documents.

The use of beneficiary designations may be an effective way to avoid or expedite the probate process. Getting through probate in a timely manner may minimize the risk of conflicts between family members while also minimizing the cost of settling your affairs.