A Community Firm
Focused On Your Needs

How important is a secondary beneficiary in your estate plan?

Too often, individuals will develop a comprehensive estate plan and avoid making any revisions after significant life events occur. From a change in marital status to the loss of a loved one, an estate plan is a set of documents that should be reviewed and revised every three to five years. One way people can ensure the estate plan is accurate for longer periods of time, is by including secondary beneficiaries.

A secondary beneficiary, often called a contingent beneficiary, is named in a will, trust or other financial account and will inherit an asset in the event that the primary beneficiary dies before the creator of the document. Additionally, if the primary beneficiary disclaims the inherited assets or he or she cannot be found at the time of the grantor’s death, the inheritance passes to the contingent beneficiary.

Preventing familial disputes

Having both primary and secondary beneficiaries listed in your estate planning documents can help avoid unnecessary probate delays and, in some situations, prevent heated familial debates over the rightful heirs.

With an estate plan in place, it is wise to be mindful of changing relationships. It is not uncommon for friends and family members to fall out of favor with each other. New relationships are built, and old relationships fade away. While this might not be something you want to revise on a regular basis, having a secondary beneficiary in place could help you make quick decisions when an update becomes necessary.

No matter your age, health or wealth, it is crucial that you have a comprehensive estate plan in place. It is wise to examine these documents every three to five years to ensure everything is accurate while taking the time to revise them when a significant life event occurs. If you need guidance, do not hesitate to seek the insight of an experienced attorney.