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Should You Name Irrevocable Beneficiaries?

Should You Name Irrevocable Beneficiaries?

July 07, 2022

When it comes to estate planning, one of the most important decisions you'll make is who will receive your assets and take over your estate. To help ensure your loved ones receive the assets you want them to have, you can name irrevocable beneficiaries.

What are irrevocable beneficiaries?

Irrevocable beneficiaries are those individuals or entities who will receive the benefits of a will or trust and cannot be easily removed from your life insurance policy. If you name someone as an irrevocable beneficiary, they are legally responsible for ensuring that the assets are transferred to the intended recipients.

Keep these things in mind when naming irrevocable beneficiaries:

  • Is the person or entity you choose capable of handling your money and property?
  • Did you list all your assets and specify who will receive them if you don’t have a will or trust?
  • Have you documented your decision by updating your will or trust documents and including a copy of the document with your estate planning paperwork?

Why name them?

Naming irrevocable beneficiaries is one of the more important actions you will make when creating your estate plan. This decision can have a significant impact on how your assets are distributed. This can provide clarity during difficult times and help avoid conflicts over who should receive your estate.

But naming irrevocable beneficiaries can also mean that you won't be able to access or change who your assets go to without the beneficiary's consent. This inflexibility means that it would be nearly impossible to change your mind after it’s been named, so it's important to be certain that your beneficiary is the right one for your legacy.

What happens if you don't name them?

If you don't name your beneficiaries, the terms of your will may dictate whether or not your estate is distributed to them. Generally, if there are no specific instructions in your will about who should receive which assets, the assets will be distributed according to state law. This means that any surviving spouse and children may be entitled to receive a share of the estate.

By naming irrevocable beneficiaries, you can help ensure that your loved ones receive the money and property they deserve. If you’d like more information about how you can begin the process of naming your irrevocable beneficiaries, contact the office.

This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.