Some would argue that the point of estate planning is to have a Plan B, or a plan for when your first plan doesn’t go as anticipated. Sometimes heirs and designated beneficiaries don’t live to benefit from an estate, or they do something that makes them no longer qualified to benefit. Thus, an alternate beneficiary would benefit, if named, to ensure nothing is left to chance.
What’s an alternate beneficiary?
An alternate beneficiary is a person who will benefit from an estate or part of an estate if the primary beneficiary won’t or can’t benefit. For example, a mother bequeaths a farm to her oldest son. However, the oldest son doesn’t want the farm and is too sick to farm even if he wanted to do so. He refuses to take the farm. Now, the farm goes back to the mother’s estate—unless, of course, she named an alternate beneficiary to take the farm in case the oldest son didn’t want it or died before she did. Say she named her best friend, a neighboring farmer, as an alternate beneficiary. Now, the farm will go directly to the friend, who wants the farm and is willing to take it, without it going back into probate.
Why would I want an alternate beneficiary?
Again, an alternate beneficiary is the Plan B, or even C, of estate giving. It ensures that a principal’s estate will remain in the hands of his or her chosen beneficiaries. In the prior scenario, without an alternate beneficiary, the farm would have gone back to the mother’s estate, and a probate judge would then decide who gets the farm based on the laws of succession. This may end up being a person whom mom would have never wanted to inherit her property. Naming an alternate beneficiary ensures that mom has the final say of where her property goes, rather than leaving this decision to a court or a judge.
Create a “Plan B” to stay in control of your estate plan.
If you want the peace of mind knowing that your estate will pass only to the beneficiaries of your choosing, talk to a qualified Ohio estate planning and elder law attorney about naming alternate beneficiaries. Our attorneys will help you work through establishing contingency plans thus avoiding the most common issues that arise when life throws curve balls into your initial plan. If you’d like help getting started, contact our law firm at 877-653-3450 to schedule a complimentary initial consultation.