James R. Balmforth: Beneficiary of a Will

It is important to select and name the beneficiary of a Will with care. The beneficiaries will receive the assets or benefits that have been designated in the document. There may be a single beneficiary or even multiple beneficiaries. An estate planning lawyer can advise you on how to select them.

You need to be careful about how you name a beneficiary of a Will. While identifying beneficiaries by name and relationship is what you want to do, problems can still arise. For example, suppose you name your children as beneficiaries. Should one of your children predecease you, you will need to specify what happens to that person’s share to avoid confusion. If you want that child’s share to go to his or her heirs, then you must make that intent clear in your beneficiary designation. This can be accomplished by clearly setting forth an alternate beneficiary designation or by including a per stirpes clause.

Another consideration when naming a Will beneficiary is the status of the person you want to benefit. For instance, if your child is not over the age of 18, the child does not have the legal capacity to receive a bequest in his or her own right. In these situations, a testator should consider having a child’s share placed into a trust the terms of which are set out in the Will. This type of trust is a testamentary trust. In a typical situation the Trust provisions may provide that the property is given to a named trustee to hold in trust for the child until the child reaches say age 21 at which time the child receives one-half of the fund. The trust can then provide that the balance of the trust is to be paid to child when he reaches age 24. Also, the trustee can be given broad powers to distribute the trust principal and income to the children throughout the term of the trust.

Joint Bank Account

The probate process is complex, and some people will take steps to avoid it. Additionally, probate proceedings are also a matter of public record. To avoid probate, one of the things some people do is name another person as joint owner of property such as a joint bank account or real estate. When there is a joint bank account at death, the surviving owner automatically becomes the sole owner of the entire bank account or other joint asset. A Utah probate lawyer can explain how this process unfolds.

Owning assets jointly with another can be a simple way to distribute an estate. However, problems can arise where the joint ownership was created only for the convenience of the asset owner during their lifetime and did not actually reflect their desires as to the distribution of their property upon death. In fact, the distribution of the entire asset to the surviving joint owner upon death may directly conflict with the decedent’s estate plan as set forth in a Will. Unfortunately, the automatic nature of the transfer of joint assets generally cannot be circumvented by the more general language of the decedent’s Will.

This situation is a very common cause of Estate Litigation in the Surrogate’s Court, with which an estate attorney is familiar. A typical case may involve a child who lives with or near a parent. Although the parent has created a Last Will leaving all of his assets equally to all children, unknowingly, the parent puts the one child on the bank account as a joint owner so that the child can help the parent with his daily bills and finances. When the parent dies, the entire joint account automatically becomes the property of the one child and the provisions in the Will do not apply.

Utah attorneys, as well as those throughout the state, are aware that planning an estate requires understanding the nature and ownership of all of the assets involved. At their own peril, many people do not pay close enough attention to the names they put on their assets and then probate litigation occurs where family members allege undue influence and improper conduct on the part of individuals who benefit from these oversights. An estate lawyer can review your situation to determine what is best for you.

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