Estate planning does not involve writing a last will and testament exclusively. There are other documents, including power of attorney forms and living wills, that the planner could compose. Then, some financial decisions allow for the transfer of money or assets outside of probate. Purchasing a life insurance policy is a way to provide for a beneficiary without dealing with the California probate court. As with other aspects of estate planning, designating insurance policy beneficiaries requires careful thought.
Beneficiary concerns and life insurance
Not all life insurance policies are the same, and one policy type may be preferable to another. For example, choosing term life insurance could be the appropriate selection for a particular planner. Investing time into choosing the right policy is not the only responsibility an estate planner may consider. Determining how much coverage to purchase and who to designate as a beneficiary are essential steps.
The latter point about choosing beneficiaries requires some additional clarification. Circumstances change, and the policyholder might need to alter the beneficiary designation at some point. Those who overlook this step could make a terrible mistake, which surviving family members may regret.
Making estate plan changes
Unless the policyholder changes the beneficiary designation, the named beneficiary will likely receive the insurance settlement. When dealing with fraud, that might not be the case. However, merely forgetting to remove the beneficiary’s name may not support any claims the person does not deserve the payment.
In addition to removing beneficiaries, it might be necessary during estate planning updates. Adding beneficiaries may be advisable. For example, new children or grandchildren could be named on the policy.
Of course, the same approach may apply to other aspects of estate planning. Wills, for example, may require changes and updates as well.