Beneficiary Designation Audit Time

There is the right way to do just about anything, and it's usually not the easy way. Thankfully there are those rare shortcuts that are actually pretty solid, so long as you remember when and where to take them. So it is with designating beneficiaries as part of your estate planning.

When it comes to proper estate planning, the shortcuts are the existing options you already have with insurance and retirement accounts that allow you to designate your beneficiaries on a simple beneficiary designation form.

For many of us, the beneficiary form is the first practical experience we have with estate planning. For thoughtful and downright practical tips for designating your beneficiaries designations consider a recent article in Fox Business titled “Bulletproofing Your Beneficiaries.”

When it comes to beneficiary designations, some of them are shortcuts and some of them are dead-ends, and still others can completely undo your estate plans if you simply forget about them. That noted, there are at least two key points to consider. The second point is that beneficiary designations must be coordinated with your overall estate plan to the right beneficiaries (or even a system of trusts) to eliminate probate and even taxes. The first point, and a source of immediate concern, is that you must know who all of your beneficiaries are on all your accounts at all times.

If you don't know already, then it's high time for a "beneficiary audit" of all your accounts and, if necessary, a reworking of those designations to meet your distribution goals.

Reference: Fox Business (October 1, 2012) "Bulletproofing Your Beneficiaries"