Estate planning can feel like a monumental task. Not only do you have to confront your own mortality, but you have to plan for the safety and security of your family’s future. While it can be stressful at times, it’s important not to write anything off or avoid a process simply because it overwhelms you. This includes naming beneficiaries.
The consequences of not naming beneficiaries
Some people do not name beneficiaries in their will. Whether they are afraid of hurting their family members’ feelings or simply think it’s a waste of time, there can be some downfalls to not having beneficiary designations in your will:
- Increases chance of family disputes: When you don’t name people to inherit specific assets, this can cause tension, competitiveness and confusion in family members. It can lead to fights over certain assets, which can sometimes even lead to estrangement and bad blood.
- Adds time to estate distribution: You might be saving yourself time by not naming beneficiaries. But in the long run, your family will then have to spend much more time figuring out how to fairly distribute your assets. In addition, it can delay the transfer of account ownership and funds.
- No control of where your assets go: When you don’t designate beneficiaries, you have no control over what happens to your assets after you’re gone. Often, valuable assets require someone willing and able to inherit them, such as property or bank accounts. If you don’t name beneficiaries for them, those assets might go to someone who cannot manage them properly.
Take the steps to protect your future
While it may seem unimportant, listing beneficiaries in your will is as crucial as any other part of the estate planning process. And completing the task isn’t even a difficult job to do. All you need to do to list a beneficiary is include personal information such as their full legal name, date of birth and contact information alongside which asset they are to inherit.
Also, you don’t need to name a beneficiary for every single asset in your estate. Generally, only larger and more valuable assets like houses, vehicles, bank accounts and life insurance should have beneficiaries attached to them. Other assets like personal items, clothing, furniture and memorabilia don’t necessarily require a beneficiary.
Ultimately, the task of naming beneficiaries is a way to ensure a secure future for your estate and your family in the years to come.