It can be very tempting for Minnesota residents to skip estate planning, especially if they don’t think they have a lot of assets to leave behind. However, failing to create an estate plan or name beneficiaries can cause a multitude of problems.
What happens if you don’t name a beneficiary?
Most estate plans will have you name a beneficiary as part of the process. Even if you don’t have a formal estate plan, odds are that you have a retirement account or life insurance policy through your work that required you to name a beneficiary when it was set up.
If you don’t have an estate plan at all, your belongings and assets would be designated to your next of kin. If you’re not married, this would be your children or your parents. This isn’t a quick and easy process, however. Without a formal estate plan or named beneficiary, your assets would still go into probate, and it could be months before your next of kin has access to your finances and belongings.
What happens if the beneficiary is wrong?
Often, beneficiaries aren’t updated in life insurance policies or estate plans before the person’s death. Some examples of this are ex-spouses being named the beneficiary or deceased parents not being taken off the beneficiary list.
If the incorrectly listed beneficiary is still living, they may still put up a fight to keep your belongings and financial assets. When this happens, it can cause a lot of financial hardship for your family as well as emotional grief as the process is dragged out and can take a long time to resolve. As a result, it’s best to frequently update your list of beneficiaries.
