Naming primary and secondary beneficiaries for life insurance policies, annuities and retirement accounts is one of the easiest and most effective estate planning moves you can make. Here’s why it’s important to make changes as needed to keep these details current.
Marriage, Divorce, Kids and More
Checking your beneficiaries on a regular basis (even annually is enough) can help protect you from ending up with an ex-spouse or even someone who is no longer living from being first in line to inherit your assets. Make sure the people in your life who mean the most to you today are set up to receive what you want them to have.
Bypass Probate and Override Wills
If you’ve taken steps to name a beneficiary for a retirement account, this becomes a legally binding contract that likely takes precedence over anything that has been laid out in a will or trust. Keep track of all IRAs and 401(k)s and update them as necessary to ensure all your assets go where you want them to go.
Explore Beneficiary Strategies
It’s common for spouses to name each other as primary beneficiaries, but married couples (especially those with children from other marriages) should make sure to add “simultaneous death” paperwork to make bequests clear in the rare event both spouses pass away at the same time.
Additional customized designations are also worth looking into if you have multiple primary or multiple contingent beneficiaries. With “per stirpes” and “per capita” designations, for example, you can provide for a variety of circumstances, such as a beneficiary predeceasing you.
Taking the time to keep your wishes current can make life easier for your beneficiaries. Have questions? Please don’t hesitate to reach out.