To ensure that you pass on an inheritance without unnecessary problems, you should be aware of possible mistakes that could derail your plans for your children or anyone you wish to inherit from you. Sometimes even something as simple as whom you name as a beneficiary may delay or derail your plans, if your designation is not as clear as it should be.
According to Kiplinger, some families run into problems with their estate plans because some individuals in the family have similar names. There may be three generations, a grandfather, a father and a son, all with the same name. To identify them, you would usually add a Sr., a Jr., or a III after their name. However, some people might omit the qualifying suffix and just write down the name, making it harder to properly identify the intended beneficiary.
There are other ways to confuse beneficiary names. A father and a son may have the same first name but a different middle name. A cousin, uncle or nephew may possess the same or similar name as another family member. A person may omit a middle name while filling out a beneficiary form and end up creating confusion if two family members share the same first and last names.
In addition, some people change their names. Marriage or divorce can result in a person acquiring or losing a married name. There are also individuals who legally change their first name or their entire name, including their surname. A person may fill out a name on a beneficiary form without knowing that the beneficiary had changed his or her name at some point in the past.
If a beneficiary designation does not match the name of your intended heir exactly, it could cause delays in payouts or ownership transfers to that person. If two family members share a similar name, it could lead to costly, drawn out litigation as the two persons fight for the inheritance. Taking extra care during the estate planning process and consulting with legal professionals who understand estate planning may provide some benefit to families seeking to avoid beneficiary confusion.