Drafting estate plans needs careful consideration of various matters that will affect the decisions made. Many people in Alberta choose to seek legal counsel to support and guide them through setting up their wills and estates. The choice of beneficiaries is one aspect that offers various options, each with its pros and cons. Along with irrevocable, revocable and contingent beneficiaries, there might be minor children to add as well.
Naming irrevocable beneficiaries means no changes may be made without the consent of the beneficiaries, making it crucial for the testator to understand the implications of such designations. Careful consideration and thought are essential before choosing this option. In contrast, the more familiar option of revocable beneficiaries allows changes to be made at any time. However, it is crucial to keep these up to date because a divorce or a changed will do not automatically change beneficiary appointments on products like RRSPs, RRIFs, LIRAs, and life insurance policies.
A contingent beneficiary is typically designated as a second choice to receive the benefits in the event of the primary beneficiary dying before the testator. This is particularly valuable if such death occurs at a time when the testator is no longer able to appoint a new beneficiary. When it comes to naming minors as beneficiaries, a trustee must also be appointed to act on behalf of the minor in receiving and managing the proceeds.
The skills of an experienced Alberta estate planning lawyer are not only valuable when setting up wills and estates but also during occasional reviews. Changes in personal circumstances can include marriage or divorce, remarriage, beneficiary death, having children or other matters that affect beneficiary designations. Having a lawyer who is already familiar with the client’s circumstances can be an asset.