For many people here in Pennsylvania as well as all over the country, thinking about your own mortality can be a scary thing. Not only does it increase emotions but it can also raise a number of questions as well, including the one that we pose in this week's blog post title: how do you choose an heir or beneficiary?
Unfortunately, because every person's situation is different, there isn't a single catch-all answer for this question. A person has to take a lot of things into consideration when choosing an heir or a beneficiary including how they feel about the person, how receiving assets will affect the beneficiary's financial situation and whether discussions need to be made with the family regarding your choices, just to name a few.
There are some steps though that everyone should take before the pass away. Though it may be difficult to have the conversation, you should talk with your family members about your estate plan and how you would like it executed. Failing to do so before you die can create disputes that can be exacerbated by emotion-laden family members.
Another thing to consider is all of the expenses associated with your estate plan. From medical and burial costs to attorney's fees, getting these costs hammered out ahead of time can save your loved ones a headache later on. It's also important to consider the taxes that will be applied to your estate after you pass away and whether your beneficiaries or heirs will have to pay a gift tax on amounts that you leave them.
The most important thing to keep in mind though is what you want to happen to your estate after you pass away. If this means gifting to heirs unequally or leaving someone out of your will entirely, this is ultimately your decision and one your family members should respect. In the end though, disputes may still arise, which is why even if you try to avoid it, your loved ones may still need a lawyer's help in the end.
Source: Forbes, "Estate Planning 101: Picking Your Heirs," Larry Light, Sept. 24, 2014