Step 2: Beneficiaries
In this step, we'll select your beneficiaries—the people or organizations you wish to receive your assets. Whether it's family or friends who will inherit your home or a charity you want to support with your savings, this is your opportunity to decide where you want your assets to go.
The Main Questions
Who you want to receive assets from your estate?
Do you want people, organizations, or a combination to receive assets?
Who are the individuals or organizations?
What amount or percentage do you want for each person or organization?
How would you like the assets to be distributed?
For Example:
$1,000 to each of my nieces and nephews.
$3,000 to the local library where I spent countless hours.
$2,000 to the nonprofit organization in Guatemala where I volunteered.
$10,000 to the ASPCA to support animal welfare.
The remainder of my estate should be divided equally among my children and distributed in three installments:
1/3 at age 30
1/3 at age 40
1/3 at age 50
Key Terms
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A person employed or chosen to look after people or animals. This is not a legally binding designation.
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Legal representatives appointed by a court to take care of individuals who are unable to take care of themselves.
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A person who gives money, gifts or other help to a person or cause. In this case, as the creator of an estate plan, you would be the Benefactor.
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A person who receives money, gifts or other help from a benefactor. In this case, as the creator of an estate plan, you are choosing who you want your beneficiaries to be.
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Means natural born and adopted minor children, spouses, special needs adult children, household members covered by a conservatorship or guardianship, and parent's parents living in the household who are claimed on tax returns as legal dependents.
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An estate is the economic valuation of all the investments, assets, and interests of an individual. The estate includes a person's belongings, physical and intangible assets, land and real estate, investments, collectibles, and furnishings.
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In estate planning, structuring or conditioning how beneficiaries receive their inheritance allows you to set specific criteria or milestones they must meet to access their inheritance.
For example, you might require them to complete college, donate a portion to charity, maintain sobriety, or care for a loved one. Additionally, you can decide whether they receive their inheritance before or after they turn 18, or in installments over time. Ultimately, the way beneficiaries receive their inheritance is entirely up to you, enabling you to align the distribution with your values and goals.
Common Misconceptions
Myth 1
“I don't need an Will my spouse will automatically get everything.”
Myth 2
“Words are bonds and you don't need anything written down. ”
Myth 3
“I don’t need to add beneficiaries, I added them as joint owners to my bank accounts. ”
Myth 4
“Inheritance is automatic, I don’t need an estate plan.”
Myth 6
“I don’t need a Trust, I named my young child as the beneficiary on my assets. ”
Myth 5