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Do you need to update your beneficiary?

No one likes to think about “in the event of death,” but that’s precisely what you need to consider and be cognizant of when you designate a beneficiary. Maybe you did that once and then filed those papers away. Perhaps it was so long ago that you aren’t sure of who your beneficiary is for each of your accounts. Take time this week to check on who you have listed as your beneficiary or beneficiaries.

Any life insurance contract, annuity, IRA, or company retirement plan (i.e. 401(K), 403(B), etc.) will have the option to customize your beneficiary designations. You’re also able to list beneficiaries on most non-retirement brokerage accounts and checking/savings accounts at your bank by adding a Transfer On Death (TOD) or Payable On Death (POD) designation to those accounts. Make sure you have designated contingent beneficiaries to plan for the possibility of your primary beneficiary predeceasing you.

Reviewing your beneficiaries is especially important if you’ve experienced a life change such as a divorce, remarriage, birth or the death of a spouse or relative you may have previously designated but now need to update. Emotions and life situations can take priority and leave you reeling, but it is best to make beneficiary changes as soon as possible after the change occurs. Confirm that the person or people you name as your beneficiary are those you want assets to go to in the event of your death.

Make sure your beneficiary is who you intend.

Reviewing your beneficiaries is especially important if you’ve experienced a life change such as a divorce, remarriage, birth, or the death of a spouse or relative you may have long ago listed as your beneficiary and need to update. Emotions to life situations can take over and leave you reeling, but it is best to make beneficiary changes as soon as possible after the change occurs. You may want to add a beneficiary in certain cases as you can have more than one beneficiary listed. Be sure that the person or people you name as your beneficiary are those you want assets to go to in the event of your death.

Why is checking your beneficiary so important?

Keep in mind that naming a beneficiary supersedes the terms of your will. Proceeds to beneficiaries are not subject to the probate process and the assets are distributed to directly to the designated beneficiaries. Make sure your named beneficiaries are who you intend on transferring that specific asset or assets to at your demise.

Establish a habit of checking estate planning documents regularly.Taking the time to review and keep your documents up to date will save your loved ones additional heartache and confusion at one of their greatest times of need.

Make it a point to review your beneficiary designations every few years so they do not become outdated. This habit will keep you focused on your ultimate goal of wealth-building for you and protection for your family.

As future life insurance, 401(K), IRAs and other investments or bank accounts are established, designate your beneficiaries immediately, but also let that action serve as a reminder to check all your important documents again. Periodically reviewing your beneficiary designations ensures your best intentions are realized.

As part of the financial planning process at EagleStone, we make it a point to review the beneficiary designations on the accounts that we manage for you whenever we meet. If you ever needed a list of the beneficiary designations we have on file for your accounts, please don’t hesitate to reach out to us to make sure they are accurate and up-to-date.

 

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020