March 2003

Naming Contingent Beneficiaries

Kudos to Mel Maisel and Maurice Kassimir on a much-neglected subject, “Coordinating Wills with Beneficiary Designations” [Estates and Trusts, November 2002]. It is a key component of estate planning that is often overlooked.

May I add one further admonition. When considering beneficiary designations one should not take lightly the naming of contingent or secondary beneficiaries. This is especially true where minors are involved. Inevitably, different circumstances require different results. In some cases, such as life insurance policies, it may be appropriate to name one’s estate as the contingent beneficiary (being aware of potential creditor claims), thereby utilizing trusts already established in the will to control funds for minors. (It is quite different for 401(k) plans, as the article points out.) This is just one example of how one’s determination of contingent beneficiary(s) may differ from the choice of primary beneficiary.

Estate and financial planners should not give short shrift to this important area.

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