When you create a will or trust, your plans are clearly detailed. You want your assets to go to specific beneficiaries who may include your spouse, children or grandchildren. Usually, you don’t think that you will outlive your heirs. No one wants to outlive their heirs, but, sometimes, tragic life events happen.
This is why it’s important to name alternate beneficiaries. While you’re making those additions to your estate plan, name an alternate executor as well as a second level of alternate beneficiaries.
Name the individuals
If you choose to name a group of people as alternate beneficiaries, please provide their individual names. For example, if your will declares that certain assets shall be inherited by your “nieces and nephews,” you better provide their names in order to avoid any potential problems.
What if one of them dies? And how will that person’s shares be distributed? It also may prove difficult to determine who belongs within that group of nieces and nephews. Look at the case of the late musician Prince, who died without having a will. It took the state of Minnesota a great deal of time to determine his heirs, including some would-be heirs. (A niece and grand-niece of Prince’s were removed from the list of heirs because they did not have any genetic ties.)
Update your will when life events arise
Continue to update your will and other estate documents, especially when life events occur. This would include a marriage, divorce, birth of a child, the gaining of a significant inheritance, and the death of a close family member who had been named as a beneficiary in your will.
If the latter happens, create a new will or trust and then name the former alternate as the primary beneficiary, while adding the name of a new alternate. Your plans may prevent a great amount of confusion.