As an estate planning lawyer, I see costly mistakes made by people filling out beneficiary designations or co-owning real estate without understanding the consequences.
Minor Children as Beneficiaries: Children under age 18 cannot legally manage assets. If a minor child is named as beneficiary of life insurance or retirement assets, someone has to be appointed as Conservator by the Probate Court to manage those assets. The Conservator must pay for a bond, provide annual accountings to the Court, and obtain Court permission to sell or mortgage the property.
You can provide for a minor child or grandchild without these complications through a custodial account or a trust.
Failure to Change Beneficiaries: Many people with IRA’s, 401ks, and life insurance fail to change the beneficiaries when their circumstances change. Has your spouse named you as beneficiary of his or her life insurance, or is the beneficiary still the ex?
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