For many, developing an estate plan is a singular struggle. These individuals work through the process and file the set of documents away, never to be reviewed or revised. Unfortunately, these people could overlook a factor that might potentially lead to unnecessary delays in the distribution of assets – the lack of secondary beneficiaries.
Secondary beneficiaries, often called contingent beneficiaries, are often put in place in an estate plan in the event that the court cannot distribute assets to the named individual. With a secondary beneficiary in place, the inheritance transitions smoothly without additional costs or unnecessary delays. There are numerous reasons why this could be important, including:
- The primary beneficiary dies: With no secondary beneficiary listed in the estate plan, if the primary beneficiary dies before the testator, it can lead to unnecessary delays in the legal process. With a secondary or contingent beneficiary in place, the distribution of assets smoothly moves to the next individual without a delay.
- The primary beneficiary refuses the inheritance: There are many reasons why a primary beneficiary might refuse the inheritance. Maybe the relationship has changed and the beneficiary would rather not collect the item. Perhaps the asset represents a physical, emotional or financial burden the primary beneficiary would rather not accept. In any event, with a contingent beneficiary identified, the inheritance quickly transitions.
- The primary beneficiary cannot be located: It is not uncommon for people to lose touch over years and decades. From changing jobs to international relocation, it is possible the primary beneficiary cannot be located. Additionally, hundreds of thousands of people choose to move off grid and live a quiet existence. Unfortunately, it can make them difficult to locate during the probate process.
These reasons and numerous others could lead to significant delays in the probate process. These delays can be financially or emotionally challenging to surviving loved ones. It is wise to take the time and identify contingent beneficiaries to avoid unnecessary delays and potential family disputes in the future.