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<\/p>\n Email Link<\/p>\n \n Maybe you\u2019ve heard of \u201cThe Gentle Art of Swedish Death Cleaning.\u201d It\u2019s a guide to proactively downsizing your stuff while you\u2019re still alive. Doing so spares your heirs the mess of doing it themselves, and the potential fights they may have in the process.\n <\/p>\n \n Similarly, you can avoid leaving a mess behind for your family by being meticulous now about identifying who you want to get your money but also knowing a little about how the process will play out when you\u2019re gone.\n <\/p>\n \n Specifically, you should be aware of the importance of naming beneficiaries on key financial accounts, such as your 401(k)s and IRAs, as well as your life insurance policies and annuities, and sometimes even your brokerage and banking accounts<\/a>.\n <\/p>\n \n Put simply, anyone you name as a beneficiary on those accounts will be the person who gets the money, regardless of the wishes you express in any of your other estate planning documents.\n <\/p>\n \n \u201cIf you have designated beneficiaries on an account and they\u2019re living, that trumps your will or trust \u2014 unless the beneficiary designation is to the trust,\u201d said Jeffrey R. Gottlieb, an estate planning attorney in the northwest suburbs of Chicago.\n <\/p>\n \n It will also streamline the process of the money from a given account being transferred quickly to your beneficiaries. That\u2019s because the account with named beneficiaries won\u2019t be in the part of your estate that must go through the court process of probate<\/a>, which authenticates your will after you die and allows for the net proceeds of your estate to be distributed to your heirs once your debts and expenses are paid.\n <\/p>\n \n Settling your estate can be very upsetting for your family if a financial account is given to a beneficiary who was not in your life at the time you died. Think here about an ex-spouse you no longer want to leave money to but whose name you never took off the account. Or a person you named as a beneficiary who has already died.\n <\/p>\n \n That\u2019s why, Gottlieb said, \u201cIt\u2019s very important to update your beneficiary designation whenever there\u2019s a (big) life change.\u201d\n <\/p>\n \n In the case of a beneficiary who pre-deceases you, the person next in line to get their share of your money will depend on what you specified when filling out your beneficiary form.\n <\/p>\n \n For example, say you left half of your 401(k) to your brother. If he dies before you, who do you want to get his share? His children? The other account beneficiaries? Someone else entirely? A charity?\n <\/p>\n \n \u201cIt\u2019s always important to consider when doing a designation whether you want a beneficiary\u2019s kids to receive it, or other beneficiaries,\u201d Gottlieb said.\n <\/p>\n \n If you haven\u2019t named any beneficiaries, the default beneficiary for your account in most instances is your estate.\n <\/p>\n \n \u201cIf you don\u2019t name them on accounts, the money gets marshalled into your estate and goes through probate court,\u201d said John Rossi, an Ohio-based attorney with probate estate litigation experience and a consultant to Steward, an online estate planning service that provides a technology platform to create a trust with guidance from attorneys.\n <\/p>\n
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