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What you should know about beneficiaries

It is completely natural to worry about what will become of your assets after you are gone. You spent your whole life working and saving so that you and your descendants could enjoy the fruits of that labor. You have every right to ensure it passes into the right hands.

There can be a lot of uncertainty over who receives what following your passing, and it may put strain on the relationships within your family. Designating beneficiaries can ease this tension.

How does designating a beneficiary help?

In the Commonwealth of Massachusetts, you can designate a beneficiary for bank accounts or stocks so that this money automatically goes into the hands of the person you choose upon your death. Up until that point, you still have full access to these accounts.

A benefit of taking this option is that your estate might not need to go through probate for these particular assets. Avoiding court gives you the peace of mind that your relative receives the asset as you intended.

Does it matter which person you choose?

You are welcome to designate anyone you like, but there are some caveats you should be aware of. Always make sure you update your beneficiaries when you experience significant life events. Naming an ex-spouse or deceased person negates the purpose.

If you decide to leave a sizable sum to a minor grandchild, he or she will not be able to take control of that money until the age of 18. In the meantime, the court will name a conservator to oversee the account. If you are firm on your grandchild inheriting the money, consider setting up a trust ahead of time. This gives you the authority to appoint a conservator yourself and you can determine the age at which the child receives the funds.

As you prepare your estate, it is important to take all the necessary steps to address ownership of your assets. A good estate plan simplifies the process for your family during a very tough time.

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