Think of the loved ones who have depended on or supported you over the years; the organizations and community groups that have enriched your life; the friends who have always been there for you.
If you want to provide for all of these people when you pass away, then it’s important to begin considering your estate plan, including matters of wills and trusts.
In order to ensure the equitable designation of your assets in line with your wishes, you’ll need to be thorough, organized, and up-to-date when it comes to all elements of your estate plan.
When creating a will that will move quickly and efficiently through the probate process, one of the most critical considerations is who will inherit your various assets, a group usually known as beneficiaries (or legatees, or, sometimes, inheritors).
Who Can I Name as a Beneficiary in a Will?
When it comes to designating beneficiaries, one hard and fast rule to bear in mind is that you cannot name anyone who was a witness to the signing of your will. Beyond that, broadly speaking, you have the right to give your assets or property to whomever you choose, including:
- A spouse
- Children
- Grandchildren
- Other relatives (such as nieces or nephews, for example)
- Friends
- Charities and other institutions or organizations (such as churches or schools)
Of course, it’s also important to remember that there are many stipulations and considerations that can apply to these different groups or individuals. Across the board, for instance, clarity is important; as you name beneficiaries in your will, you’ll want to ensure that you’re using a clear, precise, recognizable name, and considering the possibility of naming alternates.
There are also various, specific circumstances that you may want to consider as you dig into estate planning.
Spouses
For example, when it comes to your spouse, you may wish to leave property via other estate planning measures. Generally, for instance, assets owned in joint tenancy with rights of survivorship can avoid probate entirely, since your share of ownership passes automatically to your surviving co-owner in the event of your passing.
Similarly, in Illinois, many assets and accounts – including many bank accounts, investments and retirement plans, insurance policies, pension plans, and even certain property – can be transferred outside of probate via a “Payable-on-Death” (POD) or “Transfer-on-Death” (TOD) designation.
Children
There are various factors to consider when it comes to your children. For instance, you may wonder who, in the eyes of the law, actually qualifies as your child for will-making purposes. Are there certain designations for biological children and adopted children? Step-children? Working with an attorney may be one way to help fully understand the legal status and impact of your relationships.
Many people also wonder what it takes to name a minor as a beneficiary. Certainly, there are ways to do this, including naming a custodian under the Uniform Transfer to Minors Act (UTMA) for gifts, or leaving the asset in a trust, managed by a trustee until the beneficiary comes of age.
On the other hand, failing to properly account for designations to minors could result in a longer probate process, as a court may need to set up property management. Similarly, failing to fully consider and explicitly acknowledge certain matters, such as disinheritance, could lead to disputes or questions that might prolong the probate process.
Organizations and Institutions
While you may, broadly speaking, leave your property or other assets to just about any organization, it is important that you make it abundantly clear who the recipient is intended to be.
In many cases, this may mean reaching out to an official with the organization – say, a church, charity, or school – to determine the name or department that will work best. If you also wish to specify how you want money or an asset to be used, you may want to consult with an attorney to see what your options are for ensuring that your wishes can and will be followed.
Pets
One last thing worth noting, because it comes up more often than you might think: You cannot directly leave your assets to a pet in your will. While you may want to use your estate plan to take into account the ongoing care of your pet after you pass, by, say, naming a caretaker or setting up a trust to provide them with funds earmarked for pet care, you cannot leave your car to your dog.
The bottom line? Specifying who you want to receive your assets via a will, trust, or some other mechanism is a vital part of the estate planning process – one that must be taken on with care, and not left until it’s too late. Should you fail to name inheritors for a property, state intestacy laws take effect, meaning that you – and, more importantly, your loved ones – will have essentially no say in how your assets are divided.
Have any further questions or concerns about the estate planning and administration process? Don’t hesitate to drop us a line to start a conversation today!
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