The Forgotten Step In Estate Planning

Estate planning is an important tool we use to make sure our assets in bank accounts and different investment accounts (retirement accounts, taxable accounts, life insurance policies) go into the hands of the right people, our loved ones. Most of us are active in estate planning. We create wills and trusts and designate power of attorneys to make sure distribution of assets go to the ones we intend. However, a necessary step that is frequently missed is actively updating and reviewing beneficiaries when there are big life events, either expected or unexpected. Beneficiary designations for your accounts will supersede what is in your will and avoid probate.

Getting married, having a child or second child, dissolving a marriage, or the death of a loved one should always prompt you to review your beneficiaries and make sure they are accurate. Being aware of these life events and how they can impact the people you care about is a great place to start! Updating beneficiaries is also a simple way to lessen the burden on your loved ones.

To be extra prepared, make sure you designate contingent beneficiaries if you haven’t already. Most of the time, children are the contingent beneficiaries. Every quarterback needs a backup. In the event something should happen to the quarterback, the backup would take their place. They are second in line to the retirement assets/insurance proceeds.

I hope I have encouraged you to pick up the phone and call your financial planner, insurance company, and/or estate attorney to ask about your beneficiary designations. If you cannot remember the last time you updated your beneficiaries, that’s reason enough to say it is probably time to make an inquiry.  If perhaps you are planning to get married or have a child, think about the need to do this in the future.

Something as simple as setting a reminder on your calendar to recur each year is being proactive! Do not be afraid to go as far as requesting a copy of your beneficiary forms from your financial institution to give you peace of mind.