No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Monday, October 27, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home Estate Plans

Why Designated Beneficiaries Are Key to Your Estate Planning

by TheAdviserMagazine
6 months ago
in Estate Plans
Reading Time: 6 mins read
A A
Why Designated Beneficiaries Are Key to Your Estate Planning
Share on FacebookShare on TwitterShare on LInkedIn


Before Zygmund Furmaniuk’s aunt Mary died in 2023, she set up a trust to hold her assets and to distribute her estate, which was valued at nearly $1 million.

A retired chemistry teacher, Mary Furmaniuk was single and had no children. Creating the trust, Mr. Furmaniuk said, was her way of making sure her assets ended up where she wanted them — with him and three other nieces and nephews. But even though his aunt had a will, the arrangement caused considerable frustration for Mr. Furmaniuk, of Belmont, Mass., and one of his cousins, who were co-executors.

The hard part wasn’t figuring out the sale of her house and what to do with her valuables. The more complicated part was distributing the money in her individual retirement accounts, which had been placed within the trust — but without designated beneficiaries.

“If she had made us each 25 percent beneficiaries directly on her I.R.A.s at Fidelity, not from within the trust,” Mr. Furmaniuk said, “the monthlong duration of paperwork I had to go through, which ended up the size of a small phone book, would have been unnecessary.”

Major brokerage firms like Vanguard and Fidelity ask savers to name designated beneficiaries — the people they want to inherit the money when they die — when they open individual retirement accounts or 401(k)s. But even having them in place doesn’t cover the assets that wills do. Here is why you should have both.

Wills vs. designated beneficiaries

Wills are legal documents that lay the groundwork for dividing valuable possessions, like real estate, in addition to investments and cash when a person dies. If you die without one, the state where you were a legal resident will take over distributing those assets. And that can become a complicated web.

Every state has its own laws governing who inherits your property if you die without a will. Often, it’s the person’s closest living relatives, such as a spouse, parents or siblings. But defaulting to state laws involves rulings from probate courts, which handle legal decisions when someone dies. Getting those rulings often requires heirs to invest their time and money, and can significantly delay the settlement of an estate.

“When it comes to dying without a will, there’s this idea, and it’s not crazy, that the defaults that states adopt are broadly in line with what people would want to do anyway,” said Gal Wettstein, a senior research economist at Boston College.

A state may distribute houses, accounts and cars to a spouse first, for example. If the spouse has died, those assets may be split among children. But with property like real estate, for example, the division can get complicated. A deed to a house or land has to be clear before the heirs can sell it, Dr. Wettstein said. If there is a disaster, such as a fire or flood, before the property is sold, heirs may also have trouble filing an insurance claim to make repairs.

An important consideration, Dr. Wettstein said, is that state defaults don’t take into account how American families and households have evolved. Defaults “are not well suited to nontraditional family structures,” he said. For example, if a parent hasn’t formally adopted a stepchild, the child may not receive anything when the parent dies.

While wills must be administered by a court, designated beneficiaries may need only to show their identification and the account owner’s death certificate to an institution like Vanguard to receive a payout — but each institution will have its own procedures, so become familiar with them. The key is that naming beneficiaries will help your heirs bypass probate court and its costs.

Keep in mind, though: “One of the misconceptions that sometimes comes up is: ‘If I have designated beneficiaries listed, I don’t need a will,’” said Sabino Vargas, a certified financial planner and senior financial adviser at Vanguard. “That’s a great opportunity to provide some education, because a will does so much more than people think.”

For example, those who have minor children or pets can name guardians for them in their wills. “You can also imagine there are situations involving art, jewelry, collectibles,” Mr. Vargas said. “Unless you want to turn over what happens to your assets and the guardianship of your children to the state, we think a will is a critical piece of an overall estate plan.”

How to draw up a simple will

“Ideally, everyone should write up a will, including young people, each individual spouse and people living with partners, even if you think you don’t have much to pass on,” said Marcia Mantell, a retirement consultant in Plymouth, Mass. “Even a computer, cellphone and other tech should be passed to someone you personally name. This helps settle your estate outside of the probate courts.”

Two of the most common ways of drawing up a will are hiring an estate lawyer and using an online template, Ms. Mantell said. For those going the D.I.Y. route, it’s important to note a few technical details. First, because wills are subject to state laws, make sure to include elements your state requires. Sometimes that means recruiting a witness or two to sign the will.

Also, “most states require that you include certain language making clear that you are not being forced into the terms of the will” — for example, that you are of sound mind, Ms. Mantell said.

Getting started is easy, she said — and not necessarily cost prohibitive. “If you can’t afford to see a lawyer, download a PDF and fill it in and sign according to your state’s laws,” she wrote in an email. “Google something like, ‘making a will in [name of your state],’ and options will pop up.”

Transferring wealth where you want it to go

For an introduction to a study by the Center for Retirement Research at Boston College, Dr. Wettstein and his co-authors outlined the ways in which wills can be transformative, especially for Black and Hispanic families.

“Despite the advantages of having a will, only about two-thirds of households with heads ages 70 and older had a will in 2020, and the share of white households with a will was more than twice that for Black and Hispanic households,” they wrote. People who receive an inheritance, they added, are more likely to leave a bequest for the next generation, and people of color are less likely to report receiving an inheritance.

But transferring wealth often lays the foundation for the kind of future families strive for. The transfer of wealth via inheritance can propel a family into homeownership or a better school district, for example. Reaching those goals solely through earned income may be more of a challenge, the study’s authors noted.

“Wealth can provide a buffer,” Dr. Wettstein said. How it reaches heirs — whether through a trust, a will or a beneficiary designation — doesn’t matter, as long as it reaches them.

Still, from Mr. Furmaniuk’s perspective, it’s worth understanding every line of fine print on estate documents, whether they are issued by a bank, an insurance company or a lawyer.

When the dust settled on his aunt’s estate, “she got the outcome she desired, and things worked out fairly for all concerned,” he said. But if everyone involved had had a better understanding of the intersection of designated beneficiaries and trusts, “it could have been a whole lot easier.”



Source link

Tags: beneficiariesDesignatedEstatekeyPlanning
ShareTweetShare
Previous Post

Kotak Mahindra Bank Q4 results: PAT drops 14% YoY, NII up 4%

Next Post

A North Korean agent applied for a job at a popular crypto firm: They tripped him up with a simple question about Halloween

Related Posts

edit post
Probate vs. Non-Probate Assets: What’s the Difference?

Probate vs. Non-Probate Assets: What’s the Difference?

by TheAdviserMagazine
October 17, 2025
0

Have you sorted which of your assets go through probate, and which skip it altogether? That one choice can shape...

edit post
The Art of Letting Go: Delegating Without Fear

The Art of Letting Go: Delegating Without Fear

by TheAdviserMagazine
October 14, 2025
0

For most attorneys, control isn’t a weakness; it’s a survival skill. You’re trained to anticipate problems, manage risk, and protect...

edit post
October Is Estate Planning Awareness Month, Don’t Wait to Protect What Matters Most

October Is Estate Planning Awareness Month, Don’t Wait to Protect What Matters Most

by TheAdviserMagazine
October 10, 2025
0

October is Estate Planning Awareness Month, the perfect time to finally take charge of your financial future and protect your...

edit post
Streamlining Collaboration: How Law Firms Can Bridge the Gap Between In-Office and Remote Teams

Streamlining Collaboration: How Law Firms Can Bridge the Gap Between In-Office and Remote Teams

by TheAdviserMagazine
October 9, 2025
0

The way law firms operate has transformed over the past few years. Hybrid work, where some staff are in the...

edit post
What to Do When a Loved One Dies in North Carolina

What to Do When a Loved One Dies in North Carolina

by TheAdviserMagazine
October 8, 2025
0

Loss hits hard, and yet tasks start showing up right away. If you are wondering what to do first, you...

edit post
Webinars That Convert: Fill Seats, Book Consults

Webinars That Convert: Fill Seats, Book Consults

by TheAdviserMagazine
October 7, 2025
0

Note: This on-demand training is designed for non-Member attorneys. If you’ve wanted a reliable way to fill seats, boost live attendance, and...

Next Post
edit post
A North Korean agent applied for a job at a popular crypto firm: They tripped him up with a simple question about Halloween

A North Korean agent applied for a job at a popular crypto firm: They tripped him up with a simple question about Halloween

edit post
Crypto VC Firm Dao5 Closes 2M Fund to Focus on Institutional Adoption Projects

Crypto VC Firm Dao5 Closes $222M Fund to Focus on Institutional Adoption Projects

  • Trending
  • Comments
  • Latest
edit post
77-year-old popular furniture retailer closes store locations

77-year-old popular furniture retailer closes store locations

October 18, 2025
edit post
Pennsylvania House of Representatives Rejects Update to Child Custody Laws

Pennsylvania House of Representatives Rejects Update to Child Custody Laws

October 7, 2025
edit post
What to Do When a Loved One Dies in North Carolina

What to Do When a Loved One Dies in North Carolina

October 8, 2025
edit post
Another Violent Outburst – Democrats Inciting Civil Unrest

Another Violent Outburst – Democrats Inciting Civil Unrest

October 24, 2025
edit post
Probate vs. Non-Probate Assets: What’s the Difference?

Probate vs. Non-Probate Assets: What’s the Difference?

October 17, 2025
edit post
California Attorney Pleads Guilty For Role In 2M Ponzi Scheme

California Attorney Pleads Guilty For Role In $912M Ponzi Scheme

October 15, 2025
edit post
Dan Hotels buys New York’s Nomo Soho hotel

Dan Hotels buys New York’s Nomo Soho hotel

0
edit post
Southwest Airlines (LUV) Earnings: 3Q25 Key Numbers

Southwest Airlines (LUV) Earnings: 3Q25 Key Numbers

0
edit post
Dell Technologies (DELL) Could Benefit From 2026 Data Center Refresh, Says Piper Sandler

Dell Technologies (DELL) Could Benefit From 2026 Data Center Refresh, Says Piper Sandler

0
edit post
High Dividend 50: Blue Owl Capital Corporation

High Dividend 50: Blue Owl Capital Corporation

0
edit post
The Core Of The Peace Proposal

The Core Of The Peace Proposal

0
edit post
Is It OpenSea or Blur?

Is It OpenSea or Blur?

0
edit post
The Core Of The Peace Proposal

The Core Of The Peace Proposal

October 27, 2025
edit post
Coforge shares rally 6% after Q2 net profit rockets 86% YoY. Should you buy, sell or hold?

Coforge shares rally 6% after Q2 net profit rockets 86% YoY. Should you buy, sell or hold?

October 26, 2025
edit post
Milei’s party on track to win Argentina election in big comeback

Milei’s party on track to win Argentina election in big comeback

October 26, 2025
edit post
HSBC to recognize .1 billion in provision after court ruling in Madoff case

HSBC to recognize $1.1 billion in provision after court ruling in Madoff case

October 26, 2025
edit post
Accel and Prosus team up to back early-stage Indian startups

Accel and Prosus team up to back early-stage Indian startups

October 26, 2025
edit post
What Saudi Arabia and Bangladesh can teach Silicon Valley

What Saudi Arabia and Bangladesh can teach Silicon Valley

October 26, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • The Core Of The Peace Proposal
  • Coforge shares rally 6% after Q2 net profit rockets 86% YoY. Should you buy, sell or hold?
  • Milei’s party on track to win Argentina election in big comeback
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.