Your Life Insurance Policy Needs A Proper Beneficiary Designation

Your life insurance policy needs a proper beneficiary designation. And, if it doesn’t have this proper beneficiary designation, the funds within this policy may not go to the right person.

Going over the importance of a proper life insurance beneficiary designation, and speaking with a lawyer, will help you satisfy each one of your estate planning wishes.

Why Does Your Life Insurance Policy Need A Proper Beneficiary Designation? 

Every life insurance policy consists of funds. These funds are meant to be paid to a particular individual, in the event of your passing.

Just as an example, if you have a life insurance policy, the funds in this policy can be paid to your daughter. But, this is only if you designate your daughter as the beneficiary of these funds.

In the event that you do not designate a beneficiary for the funds that comprise your life insurance policy, they may need to go through the probate process.

Probate is long. Your daughter – or, more specifically, the beneficiary the court chooses, as a result of the process – may not receive the funds within your policy for more than a year.

On top of that, probate is expensive. Your daughter may not receive all of the funds in the policy. There is a chance that most of it will be used to pay for the costs associated with probate. This isn’t guaranteed, but it can happen.

What Should You Know About Giving Your Life Insurance A Proper Beneficiary Designation?

To give your life insurance a proper beneficiary designation, you must choose someone to be your beneficiary. This person must be an adult who does not have any special needs.

A good example of the above is as follows: if your daughter is a grown woman who does not have any special needs/the need for a guardian, you can designate her as the beneficiary of your life insurance policy.

You should also designate another beneficiary. The funds will not go to this beneficiary. But, if something happens to your primary beneficiary, those funds can go to that alternative beneficiary.

If you do the above, the funds within your life insurance policy will go to your chosen beneficiary. To make sure that this works, though, you should work with a lawyer who can make sure your beneficiaries are designated properly.

Are There Any Other Tools You Can Use?

Outside of naming a beneficiary, you may want to set up a trust. A trust will help every single one of your assets – assuming you put them in the trust – bypass probate. This will save your beneficiaries a lot of time and money.

To set up a trust, you need to work with a lawyer. Your lawyer will go over the different types of trust you can establish and, in doing so, help you set up a trust that satisfies all of your estate planning wishes. 

Speak With A Florida Estate Planning Lawyer Today 

If you would like to establish proper beneficiary designations, you should work with someone who can help. Speak with a Florida estate planning lawyer at Millhorn Elder Law Planning Group today to develop an estate plan that satisfies your wishes. 

Sources: 

law.cornell.edu/wex/beneficiary

law.cornell.edu/wex/trust