A will is a good starting point to help ensure that your assets are passed on to your heirs according to your wishes. However, it’s also important to specify beneficiaries for financial accounts and insurance policies on the appropriate forms, which may supersede instructions in a will.
In any document distributing assets to your heirs, you may want to designate contingent beneficiaries in the event that a primary beneficiary predeceases you. If your spouse is still alive, a typical approach would be to leave the assets to your spouse, with your children as contingent beneficiaries. If your spouse has passed away, you might leave your estate in equal shares to your children.
This is fairly straightforward, but what happens in the unfortunate event that one of your children predeceases you? That would depend on the language of your will or beneficiary designation form. It may be helpful to understand two common Latin terms.
Per stirpes (also called “by representation”) literally means by the roots, but it might be clearer to imagine the branches of the family tree. If one of your beneficiaries predeceases you, his or her share would be divided proportionately among his or her heirs upon your death.
Per capita literally means by the head, indicating equal shares for each member of a group. If one of your beneficiaries predeceases you, the division of assets would depend on how you defined the group of heirs.
For example, if the beneficiary forms designate that assets go to your children per capita and one child predeceases you, your assets would be divided among your surviving children, and any children of the deceased child would receive nothing. However, if you indicate that your assets should go to your heirs (or issue) per capita (or to your surviving children and children of any deceased child per capita), your assets would be divided equally among your surviving children and the children of your deceased child upon your death (see chart).
If you do not clearly specify your wishes, your assets could be distributed according to state law and/or the default method defined in your account or policy documents. Before making estate planning decisions, it would be wise to consult an experienced estate planning professional.
INVESTING RISK DISCLOSURE
Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Contact Mahoney Asset Management for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
IMPORTANT CONSUMER INFORMATION
This web site has been prepared solely for informational purposes. It is not an offer to buy or sell any security; nor is it a solicitation of an offer to buy or sell any security.This site and the opinions and information therein are based on sources which we believe to be dependable, but we can not guarantee the accuracy of such information.
Representatives of a broker-dealer or investment adviser may only conduct business in a state if the representatives and the broker-dealer or investment adviser they represent: (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state’s licenser requirements.
An investor may obtain information concerning a broker-dealer, an investment advisor, or a representative of a broker-dealer or an investment advisor, including their licenser status and disciplinary history, by contacting the investor’s state securities law administrator.
SECURITIES: ARE NOT FDIC-INSURED/ARE NOT BANK-GUARANTEED/MAY LOSE VALUE
This information is intended for use only by residents of CA, CT, DC, FL,, MA, MD, MN, NC, NJ, NY, OH, PA, and VA. Securities-related services may not be provided to individuals residing in any state not listed above.
The financial calculator results shown represent analysis and estimates based on the assumptions you have provided, but they do not reflect all relevant elements of your personal situation. The actual effects of your financial decisions may vary significantly from these estimates–so these estimates should not be regarded as predictions, advice, or recommendations. Mahoney Asset Managment does not provide legal or tax advice. Be sure to consult with your own tax and legal advisors before taking any action that would have tax consequences.
Securities offered through
Newbridge Securities Corporation,
member FINRA / SIPC
Investment Advisory Services offered through
Newbridge Financial Services Group Inc.,
an SEC Registered Investment Adviser.
Office of Supervisory Jurisdiction
1200 North Federal Highway, Suite 400
Boca Raton, FL 33432