Are your beneficiary designations up-to-date?

When was the last time you checked your beneficiary designations for your individual retirement account (traditional or Roth), employer retirement plan, annuity or life insurance policy? Are your beneficiary designations up-to-date?

When you first get life insurance or start a new retirement account, you fill out the beneficiary designation form. Years later, do you still remember where your money goes when you are gone? Is the name you wrote down (years ago) still the person you want as a beneficiary?

A beneficiary review should be on your annual financial to-do list. At a minimum, these items should be reviewed when you have a life-changing event (marriage, the birth of a child, divorce). Be sure to take advantage of the primary and secondary designations when available and ask yourself: Does it make sense to name a trust as a beneficiary of your retirement plan or life insurance policy?

To ensure that your beneficiary designations are current and up-to-date, consider the following steps:

  1. Make a list of all accounts that have named beneficiaries.
  2. Contact the financial institution or plan administrator that services your account to verify your current beneficiary designations.
  3. Keep all beneficiary documents in one, safe place.

If you are not certain you understand all the possible ramifications of your selections or you want to ensure that these documents are in synch with other aspects of your estate plan, you will want to reach out to your trusted advisor for guidance.

 

Heather Wright, CPA, CSEP

Tax Manager

Lurie, LLP

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