On one of the first days at a new job in Broomfield, a representative from your company’s human resources office may visit you. They may hand you an employee handbook and go over the different types of insurance options that they have to offer you. They’ll likely have you fill out a beneficiary designation form for every plan that you choose to take out.
It may seem innocuous enough to designate your spouse as your beneficiary and your children as an alternate. Doing this can lead to an unintended outcome when it comes to the handling of your estate, though.
Assets like insurance policies that have named beneficiaries generally aren’t passed on to your heirs along with other assets as part of your probated estate. Instead, they are transferred to your beneficiaries in alignment with Colorado state laws.
There are some dangers associated with listing your children as the contingent beneficiaries on your investment accounts, life insurance policy, home and retirement account. They could end up having them transferred to them at as young of an age as 18 or 21. This could realistically happen, especially if your spouse predeceased you and you never updated your plans’ beneficiaries to reflect any alternative final wishes.
Most parents wouldn’t rest comfortably knowing their young and financially unwise children would gain access to so much money so early on in their lives. You can take alternative steps to ensure that these accounts’ funds are available to them when they’re more mature to be able to manage them though.
An estate planning attorney can go over the benefits of updating your plan beneficiaries after your spouse’s death. They also may counsel you about the advantages of setting up a Colorado trust including your ability to have funds released at certain intervals during your children’s’ lives.