Why You Need to Keep Your Beneficiaries Updated

When is the last time that you took a look at your beneficiary designations? If it's been a long time, you may find that the people you put down 5, 10, or 15 years ago are not who you would put down today. This is especially the case if you have divorced, remarried, or had children since you opened that bank account, or first established your retirement plan.

A large portion of people's wealth is controlled by beneficiary designations. What's more, accounts with beneficiary designations are not subject to probate, meaning they pass outside of a will.

While many of us ensure that our wills are updated on a regular basis, a lot of people forget all about the beneficiary designations on their retirement accounts, bank accounts, and life insurance policies.

Remember, retirement accounts are not usually governed by a will, so it's important to keep these types of documents updated.

When to Update Your Beneficiary Designations

Whenever you experience a major life event, it's time to review your beneficiary designations. You should consider updating your documents whenever the following occurs:

  • You get divorced
  • You get married
  • You have a baby
  • A grandchild is born
  • You have a falling out with an adult child
  • There is a death in the family
  • You roll-over your 401(k)

As a rule of thumb, you should check your beneficiary designations once a year to make sure that they reflect your intentions. Most importantly, if you ever get divorced, you want to check and revise all of these documents.

When it comes to protecting those who are the nearest and dearest to you, it's necessary to take the time to ensure that their names are listed as your beneficiaries, and not someone else. Otherwise, a portion of your assets could wind up in the wrong hands.

In the case of retirement accounts or investments, it's the employee or investment holder who is responsible for updating their beneficiary designations. If you are unsure of how to do it, use our directory to find an experienced estate planning lawyer near you.

Categories: Estate Planning, Probate