“In my seminars, one of the first stories I tell is about a man with a will who left everything to his two kids equally. The wife died first. He had put his children as beneficiaries on all his savings. But he lost track of who got what. He had his daughter designated on some and son on others and didn’t keep them equal. His family fell apart,” says Lee Cave, an estate planning attorney.
“That happens all the time. As we get older, it’s harder to keep track of paperwork. If you use beneficiaries to handle your estate, they have to be up-to-date and say what you want them to say. When working with a client, we go over them so they don’t mess up their estate plan unintentionally.
“Most clients don’t even know if they have a beneficiary or aren’t entirely sure who’s listed as the beneficiary,” Lee says. “I had a married man who was divorced three different times. He had two kids. He had a life insurance policy that had his first wife as the beneficiary.” The surviving spouse didn’t receive the insurance.
“You can set secondary or contingent beneficiaries,” Lee explains. “You can say, ‘I want my children, or if one of them dies, their children to inherit.’ Or you can say, ‘My primary beneficiary is my spouse; my secondary are my two children equally.’ ”
Extra tidbit: Read more about the benefits of writing a will in part three of this feature.
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