A comprehensive will is perhaps the single most important estate planning document. In it, you can establish guardianship for any children, state funeral preferences, and name an executor. You can also use a will to leave property to loved ones, including both financial assets, like investment accounts, and sentimental items, like family heirlooms. If you’re unsure how to distribute possessions among surviving relatives, the following guide about naming beneficiaries should help.
What Is a Beneficiary?
A beneficiary is an individual who will inherit some portion of your estate after you pass. While most people choose to bequeath their property to immediate family members, you can name virtually anyone as a beneficiary. You can also leave assets to charities and organizations. It’s important to note that pets are not valid beneficiaries, though. Instead, you can leave funds for their care to those who will take them after you pass.
If you fail to include beneficiaries in the estate plans or fail to make any arrangements at all, the laws of intestate succession will determine how your property is divided among surviving relatives. In Hawaii, those who are entitled to receive an inheritance under state law include the deceased’s surviving spouse, children, parents, and siblings.
How Should You Choose Beneficiaries?
In general, anyone who relies on you for financial support or household services should be a beneficiary. If you have young children, though, you might name your spouse as the sole beneficiary and have them distribute the property to the kids when the time is right. Children cannot receive a will’s bequest until they reach legal adulthood.
Other possible beneficiaries include friends, relatives, and charities. Additionally, make sure to name contingent beneficiaries for all major assets. This will ensure you retain control over how property is distributed should you outlive any beneficiaries but pass away before you have the chance to update any existing estate plans.
If you need help drafting or updating your will, turn to the knowledgeable team at Ng & Niebling. Practicing out of Honolulu, this firm has more than 40 years of experience helping clients plan for all eventualities. Whether you want to create a trust to minimize death taxes or name a guardian for your kids, they are here to help. To schedule a free initial consultation, reach out on their website or call (808) 732-7788.