Naming a Beneficiary on Your Phoenix Will

Naming a beneficiary through a Phoenix will is very important. When you name a beneficiary, you are saving your family time and money from having to let the court determine how your assets are split up for you. Failing to designate an heir could leave your assets in jeopardy of being overtaxed or even seized by creditors.

Taking Accounts Into Consideration

Savings and Checking Accounts

Most likely, you have a checking and savings account with a banking institution that can be accessed at any point without contingencies. If your Phoenix beneficiary is not a co-signer on the account, they will not have access to the accounts – that’s why it’s very important to include these in your will.

Retirement Accounts

Retirement accounts are a particularly tricky type of account to transfer. Should you die before your Phoenix IRA or 401K is spent, a spouse beneficiary will be able to establish a new account but non-spouse beneficiaries won’t have it so easy. A non-spouse beneficiary will have to start making minimum withdraws within the first year, and minimum withdraws every year after that – that means the IRS can tax the account as income for your beneficiary.

Assets

Assets with value are often overlooked by they need to be included into your estate just as money would. Important assets include houses, cars, jewelry etc. These types of assets are often treated just like cash and are considered gifts when transferred.

When You Need a Trust

A Phoenix trust is a type of program that allows you to control how your money is spent and assets are handled when you die. This may seem like an awfully controlling move to make considering you are likely giving the money to loved ones, but a trust can be beneficial to everyone involved. Naming a trust as a beneficiary to your estate will allow you to do many different important things. Mainly, a trust comes with big tax breaks to your beneficiaries as the money the inherit will not be taxed as earned income – this protects them from losing a large part of the money to the IRS as well as keeps them from being disqualified for income based programs like Medicaid and SSI. A trust will also protect your assets from collection by creditors and settlements.

Another attractive benefit of trusts is that you are able to control where your money goes and what it is spent on. In many cases, a Phoenix trust is established instead of a Phoenix will program when the beneficiary is a frivolous spender and is at risk for splurging – which is really common for young heirs. With a trust you can actually make it so the money goes towards living expenses or education; you can also designate that the funds are to be held until a certain or until certain conditions are met, such as a marriage or birth of a child, etc. A Phoenix will is likely the better option if the circumstances are not complicated or if there is only a spouse, or children from your current marriage named as heirs.

Need Help?

If you are not sure as to what legal document you currently have contact one of our professionals to help you with your estate planning. They will make sure you have all of your grounds covered and have the right legal documents that best suite your wants and needs.