Preserving Families

And Protecting Assets

mother and two kids walking at sunset

Secondary beneficiaries in estate planning

Many estate plans will need to be modified over time, fitting the changing needs of an estate. It’s crucial that Texas residents keep their estate plans current, revising as life changes. People also need to update their estate plans to include possible emergencies that prevent delays or disputes when it comes time to administer the estate plan, such as adding a secondary or contingent beneficiary. 

Reasons for a secondary beneficiary 

A secondary beneficiary is someone named in the estate planning documents in case the primary beneficiary can’t be located or has refused to accept the distribution of assets. Two main factors that might lead to the addition of a secondary beneficiary can include: 

The death of an heir. For larger physical assets, a testator might choose to add a secondary beneficiary to prevent unnecessary probate delays. With a contingent beneficiary in place, if the main beneficiary dies before the testator, the asset won’t spend additional time in probate while the court ascertains the proper distribution. 

Changing relationships: Some relationships change over time. Whether this means forging new friendships, or disputes disrupt a relationship, it is wise to include these estate plan revisions. When it comes to contingent beneficiaries, a testator might list another beneficiary who has shown an interest in a particular physical or digital asset. 

According to many financial professionals, an estate plan should be revisited every three to five years. As people age, it’s important to remember that primary beneficiaries are also getting older. Bearing this in mind, it’s prudent for Texas residents to include secondary beneficiaries in estate planning for life insurance policies, larger assets and real property.  

Archives