Berman & Asbel, LLP

Have You Reviewed and Updated Your Designated Beneficiaries?

It is said that change is the only constant in life. Nearly every day we change, our relationships change, and our circumstances change.

However, too many people fail to take into account the reliability and frequency of change when it comes to their estate plans. For instance, you might have beneficiary designations forms in place, but have you reviewed them recently? Chances are they could use some updating if you have gone through significant life changes since you created them.

Why do I need to update my beneficiary designations?

It is crucial to update your beneficiary designations so the intended parties receive the intended property. You can also provide critical relief to loved ones by helping them avoid probate for accounts with an updated beneficiary. And while you may have a primary beneficiary designated for certain accounts, you may need to go back and assign a secondary beneficiary as well, in case the primary beneficiary passes away.

Which forms do I need to review and update?

Some of the most important documents and accounts you will want to update with regard to beneficiary designations include:

  • IRAs and other retirement accounts
  • Life insurance policies
  • Annuities
  • Certain college investment plans
  • Health savings accounts

What happens if I don't update my beneficiary designations?

This article from MarketWatch includes some good examples of what can happen if you do not update your beneficiary forms. But generally, failure to have updated beneficiaries can mean distributions are left in the hands of the courts. It can also mean that exes or estranged family members wind up receiving assets you intended to go elsewhere.

To ensure your assets and wishes continue to be protected, it is important to review elements of your estate plan, including beneficiary designations, regularly and with your attorney. This is especially important in light of marriages, divorces, adoptions, deaths and other significant life changes.

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