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Posts tagged "Beneficiary"

Estate planning can protect beneficiaries from themselves

Ohio residents may have concerns that a loved one will act irresponsibly after receiving an inheritance. However, there are ways to craft an estate plan that makes it difficult or impossible for a beneficiary to squander these funds. For instance, it may be possible to create a spendthrift trust that limits when and how much can be disbursed. This may be ideal for someone who has a spouse who likes to gamble or may have other problems managing money.

Choosing the best beneficiary for your IRA

An individual retirement account is an investment that helps people save money for retirement. When an IRA holder passes away in Ohio, a beneficiary can take over the remaining assets in the fund. Choosing a beneficiary can be a difficult task for those who have no knowledge of estate planning.

Beneficiary designations are different from bequests

Even if Ohio residents have a detailed and well-planned will, their estate plan will not work as they intended it to if they fail to take beneficiary designations into account. That is because the language in a will can be overwritten by beneficiary designations on financial accounts. Beneficiary designations allow assets to be passed outside of probate and directly to the recipients.

Transferring an IRA to beneficiaries

Ohio residents that set up an individual retirement account will usally name a beneficiary for the financial asset in the event of their death. Most married IRA owners name their spouse as the beneficiary. If IRA owners are unmarried or outlive their spouse, they might consider naming their children as the IRA beneficiaries. Though IRAs are usually inherited outright, they are sometimes left to beneficiaries via a trust.

The importance of beneficiary designations

The estate planning process can be more complicated than residents in Ohio are anticipating. There are many items one might need to assign to others, and an estate could need to be divided between multiple children and loved ones. Big assets like life insurance policies, a retirement plan and real estate may go to a few different people or organizations while personal belongings with sentimental value might go to numerous friends and family members. Even if it seems obvious, people should use care when designating beneficiaries to help ensure that their wishes can be met.

Avoiding mistakes with beneficiary designations

An Ohio resident who remarries might intend for the new spouse to receive the funds in a retirement account after their death, but a failure to change the beneficiary designation could leave those funds in the hands of the former spouse instead. There is little remedy for such a mishap once the owner of the account dies. Unfortunately, an account owner might even think that the matter is handled by a change in a will or trust.

Placing limits on inheritances in Ohio

When an individual creates an estate plan, he or she may be able to put conditions on a beneficiary. For instance, if assets are placed in a trust, the language of that trust may determine when and how the beneficiary may access his or her inheritance. One restriction may be that assets transferred to that beneficiary is used solely for his or her benefit.

Controlling beneficiary spending through trusts

Ohio residents might be interested in learning more about how estate owners can control how heirs spend their inheritance. Legal and financial professionals often recommend using a trust to accomplish these types of goals. With powers extending beyond the scope of a will, a trust can set parameters not only on who receives inheritance and how much they are entitled to spend, but how it may be spent as well.

Three primary methods to leave an inheritance

While in some cases the laws governing wills and trusts vary among the states, one of the primary estate planning goals remains consistent for individuals in Ohio and across the country. People want to leave something for their kids. Three of the basic ways to facilitate the transfer of an inheritance are by will, via a trust and pursuant to a beneficiary designation.

Beneficiary designations and estate planning

Ohio residents who are planning on how their property will be distributed when they die may want to step back and review the existing beneficiary designations on assets like retirement plans, life insurance policies and annuities. These designations take precedence over contrary provisions in a will, and they could potentially conflict with the goals of an estate plan.

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