What You Should Know About Beneficiary Rights
Before you can begin to understand beneficiary rights you need to fully understand what a beneficiary is. This is the person that you name on your financial documents that will get the money that you have if anything should happen to you. For example, if you have a life insurance policy, you will need to name someone as the beneficiary so that this person will get the money in your policy. By naming a beneficiary, the money will not go through an estate or probate at the time of your death. This makes the entire process relatively smooth. What most people do not understand is that your will does not count when thinking of beneficiaries in terms of life insurance policies or trusts that you have established. These are all things that you need to understand.
When you think about beneficiary rights and who you can name as a beneficiary of your policies the only thing you really need to think about is who you want to get the money. You can name anyone as the beneficiary as long as he or she is of sound mind and is legally competent. However, life changes and your beneficiaries may need to change as well. You will want to look over these documents every now and then so that you can determine if anything needs to change. You may have had a birth or a death in your family and you will want to make sure that it has not effected who you named as your beneficiary. If it has you will need to talk to the company or organization in charge of your policy and have this person changed.
The beneficiary rights of a minor may be controlled through a trust. This will place the money into the hands of a third party until he or she becomes of age. If you are concerned about providing for a minor, you may want to talk to a financial institution about having a trust established. This is a great way to ensure that your children and/or grandchildren are going to be cared for if anything happens to you.
When you are setting up a beneficiary you will want to think about the people that you ultimately want to protect. Beneficiary rights ensure that all money or assets will go to that person without going through the court system. The thing to remember about the court system is that it can take a very long time for the process to be completed. If you have money and assets that will be held up in probate court, you are running the risk of leaving your family without money to pay for medical expenses or funeral bills. When they need to cover these expenses, they may not have the money to pay their own bills. That is what makes beneficiary rights so nice. They are intended to help your family avoid this stress during a tragic time in their lives.
You should always talk to the company that is in charge of your policies and take the time to read all of the underlying details related to beneficiary rights. If you do not understand something in the terms and conditions you need to ask the individual that is serving you. He or she should take the time to help you understand every aspect of your policy because that is his or her job. You may even want to ask them what you need to do in the event that you will need to change the beneficiary because you do not want to leave your family in a negative situation when you are gone. It is best to plan for these things now.