Who you name as the beneficiaries of your retirement accounts and your life insurance policies, is an important part of modern estate planning. Knowing when to change them is vital.
Estate planning today is not just about going to an estate attorney to have a will or a trust drawn up. It also includes making plans for your own end-of-life care and deciding who should get your retirement accounts and life insurance policies, if something happens to you.
The beneficiaries of your accounts will get the assets by operation of law. If you have done everything correctly, then you have factored those accounts into your overall estate plan with the assistance of your estate planning attorney. Sometimes you need to review and change those designations.
Recently, the Aiken Standard listed some appropriate times to do that in "On the Money: Don't disinherit your loved ones," including:
- If you get divorced or remarried, then review your accounts to make sure you are not leaving things to an ex-spouse or that your new spouse is included.
- If you get a new employer and roll over your old account, then make sure that the new account accurately reflects your wishes.
- If the primary beneficiary on your accounts passes away, then you obviously need to make changes.
- If the financial institutions you have the accounts with change ownership, review your beneficiary designations to make sure the new company has everything recorded properly.
- If you have a new child or grandchild, consult your estate attorney about including them and whether they should be named as beneficiaries.
- If a beneficiary becomes disabled, you should talk to an attorney about creating a special needs trust. Keeping them as a beneficiary could make them ineligible for some needed government benefits.
Reference: Aiken Standard (Dec. 10, 2016) "On the Money: Don't disinherit your loved ones."
Suggested Key Words: Estate Planning, Beneficiary Designations