Beneficiaries are the heirs to an estate. They can be people and/or organizations that you designate to inherit certain assets after your death. While choosing your beneficiaries is an important part of the estate planning process, it’s also essential that you:
Name one or more beneficiaries for each of your assets
Routinely review and update your beneficiary designations, as your life circumstances and your wishes change
The FAQs below shed some more light on the importance of beneficiary designations and how they work in Colorado estate planning.
Facts & Answers About Beneficiaries in Colorado Estate Planning
We invite you to explore these beneficiary FAQs for more information. Don’t hesitate to contact Evans Case, LLP for a free consultation whenever you’re ready for more answers.
Why Should I Designate Beneficiaries in My Estate Plan?
Naming beneficiaries can offer several benefits, including (but not limited to):
Ensuring your wishes are carried out, regarding who gets what, after you pass away: If you don’t name beneficiaries for your assets, the courts will look to Colorado intestacy laws for guidance here. That can mean your valuables, including precious items like family heirlooms, could end up going to someone whom you would not have wanted to receive them.
Potentially helping your chosen heirs avoid or expedite the probate process:
For some assets, having a beneficiary
designation can result in an immediate transfer of those assets to the beneficiary. This can occur, for example, with funds in bank accounts that have a “pay upon death” or POD beneficiary named. By using these designations, you can make sure your loved ones don’t have to wait for probate to get the financial support they may need after you pass.
Preserving more of your assets for your chosen beneficiaries: With a well-devised estate plan that clearly designates beneficiaries, probate can be shorter or, in some cases, avoided altogether. That can lower the costs of probate and/or potentially reduce the estate tax obligations, leaving more of the estate's holdings for the heirs (instead of seeing them go towards the estate’s expenses).
Who Should I Name as a Beneficiary?
Choosing beneficiaries can require careful consideration of several factors, from the nature and scope of your assets to the laws, your wishes, and more. As you consider who to designated as your beneficiaries, think about:
The age and health of the people you name as your heirs: Do you want minors to be among your beneficiaries? What about legal adults who may have special needs, issues managing money, or addiction problems? Depending on who your beneficiaries are, you may want to set up devices, like trusts, to help manage the funds with the best interests of your beneficiaries in mind.
Whether you want to give to any organizations: Are there certain charitable causes you’d like to support? If so, what type(s) of assets do you want to designate for those beneficiaries? Again, there may need to be some special plans put in place in order to facilitate this transfer without causing more issues or challenges for the beneficiaries of your estate.
Potential contingencies: What if one of your beneficiaries passes away before you do? What if someone who isn’t named as a beneficiary tries to challenge your will? Planning for these and other contingencies can help you make sure that you have all of your bases covered—and that your wishes are properly carried out in the future.
How Often Should I Check & Update My Beneficiary Designations?
Review your beneficiaries and your estate plan once a year or whenever you experience significant changes in your life, relationships, and/or assets. Generally, it’s wise to check and update your beneficiaries when you experience things like (but not limited to):
Divorce, marriage, or remarriage
The death of a loved one
The birth of a new family member
The launch of a new business
Any major losses or acquisitions that substantially change your asset holdings
How Can I Get Help with Estate Planning in Colorado?
Contact a Denver estate planning lawyer at Evans Case, LLP. With more than a century of combined experience, our team is highly skilled at guiding clients through every phase of estate planning, from choosing and updating beneficiaries to setting up trusts, updating wills, and much more.
Call (303) 757-8300 or contact us online for a free 30-minute consultation and important answers about Colorado estate planning.
As a full-service Denver estate planning and probate law firm, Evans Case is home to trusted attorneys who have deep knowledge of the law and the most effective strategies for helping our clients achieve their objectives. Let us tell you more about how we can help you with estate planning in a no-cost, no-obligation consultation.