A beneficiary of your Phoenix estate plan is the person or organization that gets your property when you die. You name beneficiaries in your will, trust, life insurance, retirement accounts, and other legal documents. Choosing your beneficiaries is a difficult decision that can have long-lasting effects on your loved ones. Nicole Pavlik, an experienced Phoenix estate planning attorney, can guide you through the process.
How Do I Choose a Beneficiary?
There are no hard and fast rules about how to choose your beneficiaries. Most people name their spouses and children, but they can be anyone you choose, including close friends, extended family members, business partners, or charitable organizations. There is no requirement that your beneficiaries are related to you. Additionally, a beneficiary does not need to be a person or people; you can also name a charity or organization as your beneficiary.
You are not limited to one beneficiary. While you can have a single beneficiary of your estate, you can leave your assets to as many beneficiaries as you like.
The decision of who to pick is very personal, but there are various factors that everyone should consider, including whether you are married, have children, or if anyone depends on you financially. In addition, you should keep in mind the tax consideration, which a qualified estate planning professional can discuss with you.
When choosing your beneficiaries, it can be helpful to make a list of everyone you wish to include and then decide how you will divide your property among them. There are various strategies that you can use to distribute your property. An estate planning attorney can explain your choices and help you decide what is best for you.
Do I Have to Name My Spouse and Children as Beneficiaries in Arizona?
Most individuals want to name their spouse as a primary beneficiary. However, there are situations where a person would choose not to leave property to their spouse. For example, this scenario may arise when the couple married later in life and both have their own children from previous relationships. For these couples, it is critical to understand that in Arizona, you cannot completely disinherit your spouse (unless your entry into a prenuptial or postnuptial agreement). Even if the surviving spouse is not named in your will and other estate planning documents, they will be entitled to at least a partial share of your estate under Arizona law.
Like spouses, minor children are protected from disinheritance by ensuring a minimum distribution upon their parent’s death. However, you are not required to name your adult child as a beneficiary in Phoenix. The most secure way to disinherit an adult child is to state this intention in the body of your will.
What Happens When My Beneficiary is a Minor in Phoenix?
When a beneficiary is a minor in Phoenix, a trusted adult will likely be appointed to oversee the inherited property. If the property is left to a minor child in a will, the probate court will appoint a conservator to manage the child’s property until the child turns 18.
If you want to have control over the individual that will manage the minor beneficiary’s inheritance, you should create a trust. In the trust, you can include provisions regarding how and when the minor beneficiary should receive their assets.
What Happens if Your Beneficiary Dies Before You in Phoenix?
You should name both primary and contingent beneficiaries. A contingent beneficiary receives the property if the primary beneficiary predeceases the owner. Basically, a contingent beneficiary is a backup recipient. For example, many married individuals list their spouse as their primary beneficiary. They then list children as contingent beneficiaries who will recover if their spouse predeceases them or dies at the same time (within 120 hours).
In the absence of a contingent beneficiary, the inheritance would be subject to Arizona’s intestacy law and would pass to the decedent’s legal heirs.
Can You Change Your Beneficiary Designations?
In general, you can change your beneficiary designations at any time and for any reason. It is best practice to review your estate plan, including your beneficiary designations, every three to five years or whenever you have a significant life change, such as a marriage, divorce, or significant change in financial assets.
Irrevocable trusts are the exception to this rule. In general, you cannot change the beneficiaries of irrevocable trusts in Phoenix.
Your Phoenix Estate Planning Attorney
Nicole Pavlik is an experienced Phoenix estate planning attorney who can help you choose the beneficiaries of your estate plan. If you have questions about picking beneficiaries, call Nicole Pavlik Law Firm today at (602) 635-6176 for a free consultation.