Your “Ultimate Contingent Beneficiary”

It happens more often than you might think:  A person passes away, and has outlived all the people named in his or her will. If no relatives can be found, that person’s estate may “escheat” to the state – probably not something that was ever intended.  

Some estate planners suggest a charitable bequest clause to cover the possibility that ALL intended beneficiaries predecease the estate owner.  The advantage of naming a charity as one’s “ultimate contingent beneficiary” is twofold:  (1) The person avoids having his or her estate pass to distant (perhaps unknown) relatives, or even become the property of the state; (2) The estate will completely avoid federal estate taxes, and perhaps state death taxes, if everything passes to charity under an alternative bequest.  The person also has the satisfaction of knowing a good cause will benefit. 

Many people decide to include worthwhile organizations in their wills as part of their overall philanthropy – possibly leaving “tax burdened” assets such as retirement accounts and U.S. savings bonds.  They then go one step further and name an organization as the ultimate contingent beneficiary of their estate, just in case.

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