Heirs and Beneficiaries

I just got back from a trip to the beach where there were back-to-back weddings near the ocean.  So many new brides and grooms!

Are you planning to get married or divorced in the near future?  How will that affect your estate plan?

An estate plan has lots of pieces and moving parts, but let’s start with how marriage and divorce affect the basic legal documents you should have in your estate plan.

WHAT HAPPENS TO MY OLD WILL?

If you marry after signing a will and you have not specifically stated in the document that you are executing the will in anticipation of a future marriage, that will signed previous to marriage will not be valid.  If you then die without executing a new will, you will die intestate and the rules of the state of Georgia will control distribution of your assets.  That means that if you have a wife and children, your new spouse will share the assets in your probate estate with your children.

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For many of you, the bulk of the estate ("stuff") that you will be passing on to your loved ones is controlled not by your will, a trust or the probate court, but by the beneficiaries you designated on forms filed with financial institutions. 401(k)'s, IRAs, and Life Insurance policies will be distributed at your death based on whom you have chosen as a beneficiary.

Based on my conversations with clients, I'm betting that many of you have not checked those designations in a very long time - if ever.

What can happen if you name the wrong beneficiary or No beneficiary?

First, let's talk about what may happen if you name no beneficiary. If you do not name a beneficiary for a life insurance policy, after your death an estate will have to be opened to receive the money from that policy.
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An heir is the person or persons who are related by blood that would inherit from a decedent ( a person who has died) if the decedent had no will.

A beneficiary is a person (or charity or institution) named in a will to whom the decedent wishes to leave his or her assets at the time of death.

Who are your heirs?  Take your wrist and place two fingers on your other hand and place them on your wrist.  Do you feel a pulse?  If so, you don’t yet have any heirs.  That is kind of a snarky way to explain that we cannot know who your heirs are until you are dead.
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