Estate Planning

Beneficiary Requirements Handout

These are some beneficiary requirements that a client may want to put into a will or trust.  Lawyers commonly use a 30-day waiting period (or a waiting period of some other duration up to 6 months).  The other choices listed below are ideas that I have come up with.  Please let me know if you have questions about any of the choices, and whether you want to use any of them. 

            In order for a person (other than my spouse) to be a beneficiary, he or she must meet the following requirements:

     (a)  that person must be alive on the thirtieth (30th) day after my death--counting the day I die as day number one (except that personal possessions may be distributed not subject to any waiting period). 

     (b)  that person must not be residing in a mental institution at the time of my death (if my executor in good faith believes, after consulting with the person’s doctor, that the person is incapable of living alone in a house or apartment).

     (c)  that person and his/her spouse must not be residing in a nursing home at the time of my death (if my executor in good faith believes, after consulting with the person’s doctor, that the person is incapable of living alone in a house or apartment).  This doesn’t mean that all persons in a nursing home are automatically not a beneficiaries; for example,  person recuperating in a nursing home to mend a broken bone, recuperating from hip replacement surgery, or having a “stay” in a nursing home but not “residing” there, shall not automatically be disqualified as a beneficiary.

     (d)  that person must not be receiving hospice services at the time of my death.

     (e)  that person must not have a bankruptcy proceeding pending/active at the time of my death, if the assets that such person would receive are less in value than the person’s debt.

            If a person does not meet all of the above requirements, then my assets shall be distributed as if such person predeceased me. 

            I would like to specifically state the following.  It is my desire that my assets not be used to repay a designated beneficiary’s debt to the government for Medicaid benefits received by such person.  It is also my desire that my assets not be used to pay for the future nursing home expenses of a designated beneficiary.  Also, I do not want my assets to be used to pay for the medical expenses of a designated beneficiary that would either (a) not be paid, or (b) would be covered by government benefits (such as Medicaid). 

            My executor/trustee may ask each designated beneficiary to sign an affidavit that none of the above requirements excludes the person from being a beneficiary.