In this article, you will learn:
- The consequences of various mistakes in end-of-life planning
- Abilities held by spouses in the case of the death of their partner
- Why establishing a separate trust for your children may be smart
If you don’t intend to change beneficiaries, nothing will happen if you fail to keep the list up to date. However, if you really wanted to change who was going to get a 401(k), life insurance, or other assets, then if you do not make that change with the company, whoever was on this beneficiary designation will receive that money no matter what you wanted to happen. So, it could be disastrous in some cases.
What To Know When Naming A Trust As A Beneficiary Of Your Life Insurance
Many people name their trust as the beneficiary of their life insurance. This is highly effective if the proceeds of the insurance will be shared among several beneficiaries. If, instead, you want the proceeds of your life insurance to go to one particular person, you can name them as the beneficiary, and then that money will not go into your trust.
Important Tax Consequences To Be Aware Of Before Gifting Assets To Loved Ones
To preface, in general, you can gift $15,000 per year to anyone as a gift with no tax consequences. A husband and wife can give a gift, for instance, to a child, of $30,000 per year. Still, these numbers change. For example, it used to be $14,000, and in a year or two, it may change up or down. However, at this point, you have approximately a $11.5 million lifetime exclusion from gifts and inheritance taxes. That’s combined together for $11.5 million. So, if you give, say, $50,000 to someone, you do not necessarily have to pay a gift tax on that. It can be added to your lifetime exclusion. But you are supposed to file a gift tax return indicating that you are applying that to your lifetime exclusion. So, in summary, if you give $15,000 or less per person, you do not need to file a return. If you give more than that, you should file a tax return but add that to your lifetime exclusion.
One Party’s Ability In A Marriage To Change The Terms Of The Will After The Death Of His Or Her Spouse
The surviving spouse cannot change the will of a deceased spouse; that will cannot be changed at all. However, the surviving spouse can change his or her own will even after their spouse dies.
Why A Spouse Cannot Change Your Will After You Die And Disinherit The Children
Firstly, there is no “our” will, even with a husband and wife. Each individual has to have his or her own will. So, if you die, your will cannot be altered by your spouse or anyone else.
The Benefits Of Establishing A Separate Trust For The Children In A Second Marriage
Establishing a separate trust is always a good idea when there is a blended marriage with children by each parent separately. The way we do that in our estate plan trust is by creating what is called an ABC trust. So, when the first trustor dies, the trust become irrevocable and is divided into sub-trusts for the surviving spouse and for the children no matter whose spouse they are, in which each child would have a sub-trust containing his or her inheritance.
For more information on Keeping Beneficiary Designations Updated, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.