This is a short article about a basic truth about estate planning: your estate plan will have a big impact. Whether you leave ten thousand, hundreds of thousands, or millions to your beneficiaries, it will hit big in their lives.
An inheritance is a blessing you bestow on your beneficiaries. Therefore, think carefully about who should receive your blessings.
If you are married with children, it's easy: you will most likely name your spouse and your children as your beneficiaries.
If you are single, a widow, or divorced, and you have children, you will most likely name your children as your beneficiaries.
But what if you don't have children? Who do you name as your beneficiaries?
People without children can be creative and can impact people or charities beyond just family. Many people without children seem to make an autopilot reaction and name their extended family - nieces and nephews, often people they have no relationship with. They feel obligated to name family.
If you have a close relationship with your extended family, great. But if you don't even know them, or even worse, you do know them and you don't like them, then why leave them your hard-earned assets?
Unfortunately, in many cases where extended family members are named as beneficiaries of the living trust, they become greedy and demanding, making the successor trustee's job unnecessarily difficult.
My recommendation: choose as beneficiaries of your living trust and retirement plans people or charities you know and have a close relationship with. The good people in your life were put there for a reason. They will be grateful, and you will make a big impact in their lives.