When you create an estate plan in California, you’ll list a primary beneficiary as the person who will inherit your assets. Naming them as the primary beneficiary in your will ensures they are the legal recipient. You can also name a secondary beneficiary when estate planning. This action is a good idea as it transfers your assets to another person if the primary beneficiary is deceased.
Understanding how to transfer assets to a secondary beneficiary
When you pass away and have a primary beneficiary, such as a spouse, and secondary beneficiary, such as a son or daughter, listed in your will, your assets will be transferred to your primary beneficiary. However, the assets will go to the secondary beneficiary if the primary beneficiary dies. Assets will also be transferred to the secondary beneficiary when the primary beneficiary disclaims their inheritance or a will instructs a primary beneficiary to provide for the secondary beneficiary.
Naming a secondary beneficiary and will contests
Using an estate plan is an excellent tool to ensure your assets transfer to specific individuals. This option lets you give assets to your spouse or children via a will. In some situations, will contests can occur when someone, like a child or next of kin, feels they should’ve been named in the will and weren’t. However, for an individual to take this action, they will likely need to demonstrate that something about how the will was written was illegal, which may include the following:
- You, as the testator, weren’t mentally competent
- The will was written without following the law
- There is a more recent version of the will
- The will is incomplete
Secondary beneficiaries can be named in several types of accounts
Secondary beneficiaries can be named in any account in which assets are inheritable. They are often named in wills, trusts, investment and retirement accounts. When an account holder is incapacitated, a secondary beneficiary can receive their assets in some situations.
If you want to ensure your assets are transferred to a specific person when a primary beneficiary can’t receive them, it’s essential to list them in your will. Otherwise, your assets may be distributed to individuals you would not have picked.