It’s Richard Morgan at Morgan and DiSalvo, another in our series of back to the basics video newsletters. This topic is on contingent beneficiaries. These are the individuals, or charities, that will get the assets if all your primary beneficiaries are gone, but assets are left.
So what does that mean? Let’s say you’re married, not married, you have kids, whatever, so all these people are gone. There’s no children, there’s no grandchildren, no great-grandchildren, they’re all gone. Highly unlikely. This is very unlikely, however we would rather you decide where the assets go than the state where you live, in this case the state of Georgia.
So what do we need to choose? You can always pick friends and other family members, but we’re gonna keep asking the same exact question over and over and over again until you get to the end. What is at the end? We want something that self-adjusts.
There are two things that self-adjust. One is your heirs. Heirs are your closest living relatives under state law, applicable state law, in this case Georgia law. So just at that point in time, we figure out when that is, we would look at the state law, who’s alive, and we’ll figure out who your heirs are. We could have maybe half to a wife’s heirs, half to a husband’s heirs, or some aspect of that.
The other one is charity. You can have one or more charities. If this, we could have it where if this charity is not a qualified charity at that appropriate time, not a problem, the executor or trustee, whoever the fiduciary is, will go out, and find another very similar charity that does the same thing this one did that you chose when you chose them, and those will adjust. So it’s either closest family, which are your heirs, or one or more charities, or some combo.
Richard Morgan, Morgan and DiSalvo.