Who are your Beneficiaries?
Every time you open a retirement account or annuity or take out a life insurance policy, you’re asked to designate beneficiaries who will get the money after you die. You provide a primary beneficiary (or beneficiaries) and have the option to name contingent beneficiaries who would get the proceeds should the primary ones either be deceased or decline to take the money.
More Important than you Think
For many of us, the first and last time we think about the beneficiaries of our account or policy is when we open the account. We remember to update wills and trusts when life changes, but often forget to update our beneficiaries on all our financial documents. Since the declaration of beneficiaries overrules wills and trusts, this can turn out to be a problem that won’t surface until after you are gone.
Unexpected Consequences
There have been stories over the years about the ex-spouse getting the retirement account despite the fact that the owner has remarried. Or about only one child being the beneficiary simply because the other two children hadn’t been born when the account was opened. Unless secondary beneficiaries are declared and updated too, there also is the possibility that with no surviving beneficiaries, a probate court would likely decide who gets the assets.
Don’t Forget. Don’t Regret.
Every few years or so, or when a major life event happens (birth, death, marriage, or divorce), remember to go through your accounts and policies and validate or update your beneficiaries. If you don’t know who they are, you can call the customer service number on your latest statement. They also can provide you with a change of beneficiary form if you need to make some changes. In order to protect your loved ones and give them what you want them to have, it is important to keep this information up-to-date.