When you start estate planning, you will need to think about who you want to leave your assets to. This decision can change over time as new family members and friends enter the picture while others leave it after a falling out or death. You have a chance to pass down treasured mementoes your beneficiaries will remember you by, and wealth that can give your children and grandchildren their financial start.
Beneficiaries are the crux of estate planning. If you die intestate because you did not execute a will or set up a trust, the probate court will determine for you who will inherit your assets. A lawyer could help ensure the chosen people and charities will inherit your assets. Call one of our knowledgeable attorneys to learn more about beneficiary designations in Lake St. Louis estate planning.
Beneficiary Designations Avoid Confusion
Beneficiaries are not just named in wills, although that is the first document people think of when it comes to inheritance. Assets do not only include cash and jewelry, but also real estate, business interests, brokerage accounts, life insurance policies, and retirement accounts.
Failing to draft results in a person dying intestate. Subsequently, the probate court under Missouri Revised Statutes § 474.010 will distribute assets according to their designations as heirs. This process can be more time-consuming and expensive.
If no children were born of the marriage, the surviving spouse will receive the entire estate. If there are children, the spouse receives the first $20,000 and half of the estate. If there are children from another partner, the current spouse receives one half of the estate. Distributions are laid out to address different relationships right down to distant relatives. However, by not designating beneficiaries in an estate plan, it is highly likely that the decedent’s family in Lake St. Louis will disagree.
Designating Beneficiaries is a Careful Choice
Grantors in Lake St. Louis designating beneficiaries in their estate plan must consider some legalities. They cannot grant assets to pets, but they can set up trusts intended for their care should they outlive the grantor. Beneficiaries must be 19 or older, so grantors must also set up a trust to designate assets to children.
Grantors usually think of spouses and children, including stepchildren, first when determining asset allocation. Other relatives, such as siblings, grandchildren, parents, grandparents, and aunts and uncles are also candidates for bequests, along with charities and dear friends. Some assets, like insurance policies, require the beneficiary to have a legitimate financial interest in the grantor as a spouse or other dependent would have. Assorted pension funds and insurance policies have additional rules about beneficiaries, which a trusts and estate lawyer can explain.
The SECURE Act
The Setting Every Community Up for Retirement Enhancement (SECURE) Act is a federal law that became effective in 2019 to help Americans save for retirement. The act includes provisions that affect retirement account beneficiaries. For instance, the ‘stretch-IRA’ provision that permitted non-spouse beneficiaries to take distributions from inherited IRAs over their lifetime has been eliminated. Beneficiaries now must withdraw from these taxable inherited accounts within 10 years.
Call a Lake St. Louis Attorney To Learn More About Beneficiary Designations in Estate Planning
Many people think of beneficiary designations as an afterthought, but you should carefully consider what you want to leave to whom when you die. Without careful consideration, some asset transfers may be invalid and revert to your estate, leaving a court to decide where they will go.
An estate planning lawyer could ensure what you have spent a lifetime building is dispersed exactly as you wish. Your beneficiaries do not have to be your family heirs. When you designate them, the probate court will follow your wishes if your documents are in order. Our attorneys can leave you with the confidence that your assets will pass smoothly by ensuring your beneficiary designations in Lake St. Louis estate planning are properly in place. Call today to schedule a consultation and get started.