My son is the sole beneficiary of my $2M estate — but he is seriously ill and could die before me. Can I name an alternate heir now, just in case?

He’s married, in his 50s, and has two children, so Helen knows there are people who would need the money if something happened to him. What she isn’t sure about is whether her estate plan actually works the way she thinks it does.

If Jeffrey dies before her, does his share automatically go to his wife? Would his children inherit it? And what if Helen wants the money to stay within the family, but doesn’t necessarily want to leave the decision to someone else?

How to protect your $2 million legacy

At 76, Helen has plenty of reason to start asking those questions now.

It’s not something most parents want to think about. When you name your child as your beneficiary, you’re usually thinking about a future where they’re around to receive the money.

For someone with a sizable estate, that can make the backup plan almost as important as the original one.

A few changes to a will or beneficiary designations could determine where the money goes if an heir dies first. Depending on the family, a trust could also be worth considering.

The important thing is to make those decisions while you still have time to make them yourself.

What happens if your heir dies first?

This is where things can get complicated. And the answer may depend on what Helen’s will says, whether she named a backup beneficiary, and what kind of account or property is involved.

If Jeffrey dies before her, Helen’s money won’t necessarily go wherever she assumes it will. Some assets may pass to another person she named. Others could be dealt with through her will or under state law if she didn’t leave clear instructions.

That’s why estate-planning lawyers often recommend naming a contingent beneficiary — someone who steps in if the primary beneficiary can’t inherit.

Helen could name Jeffrey first and his children as the backups. Or she could decide that Jeffrey’s wife should receive the money instead. She may even want different instructions for different parts of her estate.

Allison Marketti, founder of Marketti Law Firm, LLC, told Moneywise that a contingent beneficiary is essentially a backup plan. She encourages clients to think beyond simply naming a person and ask: “If my first choice isn’t here when I die, where do I want this asset to go?”

The choice is Helen’s, but it needs to be written down properly. This is where it’s worth remembering that a will doesn’t control everything. Retirement accounts, life insurance policies and some investment accounts have their own beneficiary forms. Those designations can determine who receives the money, even if the will says something different.

“This is probably the biggest misconception I see in estate planning: A will does not necessarily control where all of your assets go,” Marketti said. “Assets with valid beneficiary or transfer-on-death designations generally pass according to those designations rather than under the terms of the will.”

So Helen’s job isn’t just to update one document. She needs to look at the whole plan — and make sure it still reflects what she wants.

Decide who should inherit next

For Helen, the first question is: If Jeffrey isn’t alive, who do I want to get the money?

She could leave it to his wife. She could split it between his two children. She could name someone else entirely.

“In your hypothetical, if [Helen’s] intention is to leave everything to her son, she should also decide what she wants to happen if he dies first. Does she want his share to go to his children? His spouse? Some combination? Or somewhere else entirely?” Marketti told Moneywise.

There’s no reason parts of her estate have to be handled the same way, either. A retirement account, life insurance policy or investment account may have its own beneficiary designation.

Those designations can name both primary and contingent beneficiaries, and can spell out how the money should be divided. The American Bar Association notes that these designations can override what’s written in a will for assets that pass directly to a named beneficiary.

That’s something Helen will want to go over before assuming her will has everything covered.

One practical place to start is with a list of everything she owns: bank accounts, retirement accounts, insurance policies, investments and property, as well as who is currently listed to receive each one. It’s not the whole estate plan, but it can make it much easier to spot an outdated beneficiary.

Update the will and the beneficiary forms

A will matters, but it doesn’t necessarily decide where every asset goes.

Helen could update hers and still have an old beneficiary designation sitting on a retirement account.

“You can change your will and still have an old beneficiary designation sitting on a retirement account, life insurance policy or investment account. Those designations can determine who receives those particular assets regardless of what the will says,” Marketti says.

Maybe Jeffrey was the only beneficiary she named years ago. Maybe she named someone else as a backup and forgot about it. Either way, it’s worth checking.

Helen could also ask her lawyer about per stirpes language. Essentially, it can allow a deceased beneficiary’s children to receive that person’s share. The exact wording and effect can vary, so this is one of those items worth having a lawyer walk through.

Consider a trust

The detail of Jeffrey’s two kids gives Helen another step to think about.

She may not want to leave a large inheritance directly to children who are still minors. A trust could give her more say over when the money is available and what it can be used for.

“Instead of giving a young beneficiary unrestricted control of an inheritance, a grandparent can name a trustee to manage it and establish guardrails for distributions, for example, allowing money to be used for education, health and other needs while the beneficiary is young and providing greater access later,” Marketti told Moneywise.

For example, Helen could set money aside for things like education, medical expenses, or housing instead of having her grandkids receive a large sum outright.

A trust can add costs and paperwork, so she’d need to weigh that against what she actually wants the money to do.

Think about the family’s financial needs

Then there’s the part that doesn’t fit neatly into a legal document, which is: What does Jeffrey’s family actually need?

If he dies, his wife could be raising two children without his income. The kids are only 10 and 13, which means there could be years of expenses ahead.