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Who Are The Common Beneficiaries Of An Estate Plan
There are many ways to dispose of estate property and assets. There are even more individuals and entities that can be selected to receive estate property and assets. One of the most common estate planning vehicles is a will.
The following are common beneficiaries included in wills to receive estate assets and/or property:
- Spouse - A spouse is perhaps the most common type of beneficiary included in a will. In the majority of jurisdictions, it is illegal to attempt to cut your spouse out of her or her inheritance after your death. Estate planning professionals caution testators to examine their spouse's abilities in managing money before any decision is made to leave all assets to a spouse. If a testator has dependents aside from the spouse, that might factor into decision-making as to whether to leave all assets to the spouse or to divide assets between the spouse and other dependents.
- Children - Many testators leave their estate entirely to their spouse. In doing so, they expect the spouse to make provisions for the benefit of the couple's children. However, estate planning professionals often caution testators to make particular provisions specific to the children, in the event that something may happen to the spouse. If a testator or that testator's spouse has children from a prior marriage, it is even more important to make particular provisions for the children.
- Other family members - Sometimes, a testator may want to make provisions to benefit siblings, parents (especially if they are elderly), nieces, nephews and other close family members. This may be true in instances where there is no spouse or there are no children.
- Friends - Close friends of the testator may morph into the status of being family members (particularly if the friend is a lifelong childhood friend of many years). Friends may take on additional importance for a testator with no surviving family members or a small family.
- Charitable Entities - Charities serve a crucial role in society and perform critical functions and services to our community and its members. Most charities, in a downturned economy, rely heavily on estate gifts for revenue funding. A testator can include a provision in his or her will to leave a gift to a charity and, in so doing, will help with that charity's mission of providing key services and functions to the community. The testator can also simultaneously advance values that are meaningful to him or her in the selection of the charity. Beyond humanitarian and moral reasons for considering gifts to charities, it makes financial sense. Tax laws provide incentives for giving to charities with the deductions provided to givers. A testator can benefit from huge income and estate tax deductions through making gifts to charities.