What is a beneficiary designation and how does it work?

A beneficiary designation is a legal document that appoints someone to receive assets such as money, property, or other assets from your estate after death. A beneficiary designation works to ensure that your assets get to the people or organization of your choice, without being held up in legal proceedings. In Texas, beneficiary designations must be put in writing and must be formally executed with the assistance of a lawyer. When setting up a beneficiary designation, you can specify who or what organization will be receiving the assets. You may choose to designate both primary and contingent beneficiaries. Primary beneficiaries are those who receive the assets under the terms of the beneficiary designation. Contingent beneficiaries are those who receive the assets if the primary beneficiary can no longer receive them due to death, incapacity, or other circumstances. Once you have established a beneficiary designation, you may need to update it, as life changes. For example, if a primary beneficiary passes away before you do, you may wish to update the designation to include a new primary beneficiary. Additionally, if you acquire new assets or if there are changes to your estate plan, you may need to modify the beneficiary designation to reflect these changes. It is important to note that beneficiary designations override any other document, such as a will. This means that any assets designated in the beneficiary designation will be distributed according to its terms, regardless of any other instructions you may have provided in a will or other document. Therefore, it is important to ensure that beneficiary designations are up-to-date and reflect your wishes.

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What is a beneficiary designation and how does it work?

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