An essential but often overlooked part of estate planning involves the naming of one’s beneficiaries. These are the people or organizations that will receive your property upon your death or at any other chosen point in the future. You have the right to nominate any party that you wish to be a beneficiary. However, you should understand that not all people can inherit all types of property. In addition, choosing some people as beneficiaries could have tax implications.
A knowledgeable lawyer could help you understand the role that beneficiary designations in O’Fallon estate planning will have on your will, trusts, and the rest of your testamentary documents. Our experienced estate planning attorneys could answer questions about your selections and help you avoid unexpected complications.
Choosing Beneficiaries and Avoiding Intestacy Complications
One of the major reasons to create an estate plan is to avoid the application of the state’s intestacy statutes. This collection of laws determines what will happen to a person’s property should they die without a will. For example, Missouri Revised Statute § 474.010 outlines which parties will receive a decedent’s property if they die without a will or a surviving spouse. Because of these intestacy rules, it is exceedingly important to have a valid will. A comprehensive will outlines exactly which beneficiaries inherit which properties.
There are some things to consider when determining who to select as a beneficiary. One important factor to keep in mind is the fact that children cannot directly inherit property. Therefore, if a testator wants a child to inherit a specific asset, they might consider protecting these items in a trust. An O’Fallon attorney could help an individual conclude whether their beneficiary designations would complicate the estate planning process, run into intestacy issues, or delay probate.
Beneficiaries and Tax Ramifications
It is important to understand that Missouri no longer levies an inheritance tax upon a decedent’s property. However, many other states and the federal government still have these estate taxes enacted. These taxes could result in a significant reduction of an estate’s value.
Therefore, when forming an estate plan and choosing beneficiaries, it is vitally important to understand the impact that estate and inheritance taxes will have on one’s heirs. Of course, people are free to choose their heirs as they see fit. However, if these beneficiaries live somewhere that still enforces the aforementioned taxes, things can change for everyone associated with an estate.
Thankfully, a lawyer in O’Fallon could help estate planners better understand the inheritance tax laws in locations where their prospective beneficiaries live. This could help parties make a more informed decision concerning their heirs.
Call Our Team About Beneficiary Designations in O’Fallon Estate Planning
Every estate plan will have one or more beneficiaries. These people are named as heirs in wills or selected to receive property through a trust. A collection of state and federal laws impact who can serve as a beneficiary and whether local governments can seize a portion of an estate through taxation.
All of these considerations might seem overwhelming, but our team is here to help with beneficiary designations in O’Fallon estate planning. Our team can determine if your selected heirs are able to inherit your assets and confirm that your decisions help minimize your tax liability. Call today to learn more about selecting heirs in a will or trust.