A beneficiary is a person or organization named in an estate plan. These people may be heirs in a will or individuals who inherit property through a trust or other estate planning document.

While it is important to craft estate planning paperwork carefully, it is also crucial to select beneficiaries who can inherit assets. Choosing the proper beneficiaries could maximize the value of an estate and help a family avoid probate court. A skilled estates attorney could provide information about beneficiary designations in Orange County estate planning to help you make the right decisions for the future.

Choosing the Right Beneficiaries

According to the law, individuals who create a will or trust can name any person they want as beneficiaries of their estates. However, beneficiary selection can often make the transfer of property difficult. Although adults can directly inherit property through an estate, children cannot. Naming a minor as a beneficiary in a will or a poorly written trust could force a probate court to create a guardianship that would hold the property until the child becomes an adult.

In other cases, a person will name a beneficiary who can never inherit or passes away before the will or trust has any legal effect. Naming a deceased beneficiary may result in a court declaring an estate void and applying the intestacy inheritance rules under California Probate Code § 6401 & 6402.

As a result, it is critical to check the ability of beneficiaries to inherit when creating a will. An experienced lawyer in Orange County could help a person name an inheritor and take proper steps to update estate plans for their future.

Eliminating Tax Burdens on an Estate

People living in Orange County do not usually need to concern themselves with estate taxes. California is one of 38 states that does not charge an estate tax upon its citizens or beneficiaries. However, other beneficiaries may live in places that levy an inheritance tax, which could lower the overall value of an estate or require tax payment upon the sale or a property.

For example, if a beneficiary lives in a foreign country, they will most likely pay an estate tax. Many countries will automatically charge an inheritance tax and may charge an additional penalty when a person inherits assets from another nation. Several states in the U.S. also retain inheritance taxes, complicating the probate process.

Selecting beneficiaries that would not be required to pay inheritance taxes could maximize the value of an estate. A knowledgeable attorney in Orange County could help a person craft an estate plan that would allow a beneficiary to transfer items to another party to avoid any decrease in value.

Talk with an Attorney to Discuss Beneficiary Designations in Orange County Estate Planning

Choosing the right inheritor of your property is an essential part of an effective estate plan. While all adults can inherit property, their place of residence could make an asset subject to additional taxation. In addition, it is essential to name beneficiaries with as much specificity as possible to avoid any potential confusion.

Consulting with a lawyer could clarify beneficiary designations in your Orange County estate plan. An attorney can answer your questions, evaluate your current plan, and explain how your choice of beneficiaries may impact your heirs and estate. Reach out now to learn more.

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