All too often beneficiaries are listed and forgotten. At the time, you might feel your list of beneficiaries is accurate and reflects your current life, but a year later that might not be the case. Whether you have beneficiaries listed on your financial accounts or in your estate plan, it is imperative that you review and update them so that they’re always accurate.
A lot of beneficiaries are unidentifiable — especially designated beneficiaries. Designated beneficiaries are those you list with your financial account holders — such as retirement accounts, banks and brokerage firms. You fill out a form and you’re not required to provide identifiable information. Some institutions don’t even require names. Check your designated beneficiaries and make sure they’re identifiable. You should have full names (including maiden names for married women), social security numbers and contact information so there is no question who your beneficiaries are.
When you have a life changing event, such as having a new child, divorcing, getting married or the death of a spouse, you must review your beneficiaries. After all, you don’t want an ex-spouse listed to receive all of your assets, especially after you’ve remarried.
All too often people forget to match their designated beneficiaries with their will. As far as the courts are concerned, your designated beneficiary forms outweigh anything listed in your will. Therefore, if you list your son to receive your retirement fund in your will, but your designated beneficiary form says your spouse, the courts will side with the form — not your will. Make sure any designated beneficiaries you have correlate with your wishes in your will.