Beneficiary designations are often overlooked.
Do you have a life insurance policy or an IRA account?
Maybe you have a pension.
If the answer is yes, then you have assets requiring beneficiary designations.
According to a recent Investopedia article “The Importance of Updating Retirement Account Beneficiaries,” neglecting to update these may cost you dearly.
Let us say you are divorced and remarried.
What if you are not divorced?
Are you safe?
The arrival of new children or grandchildren may require you to update your plan to include any such recent additions to the family.
If you named a charity as the beneficiary, you could create problems if the non-profit no longer exists.
How do you fix this?
You should regularly review your estate plan—including your retirement accounts.
Many people forget these.
While you are at it, ensure that you have contingent beneficiaries should something happen to the primary beneficiaries.
What happens if you do not designate a beneficiary?
Some states will automatically designate a spouse as the beneficiary.
In fact, a spouse may need to waive such rights in writing if you wish to name someone else in his or her place.
If you are single, the courts may determine your beneficiary according to state law or make your "estate" the default beneficiary.
What happens if two individuals were named and one died before you?
The whole account may pass to the living beneficiary.
What if you wanted the portion of the deceased beneficiary to pass to his or her children?
You would want to create a customized designation providing for this alternative distribution.
Uncertain how to make your estate plan cohesive?
Work with an experienced estate planning attorney to meet your goals.
Reference: Investopedia (2018) “The Importance of Updating Retirement Account Beneficiaries”