Update Your Beneficiaries?

Is It Time to Update Your Beneficiaries? Here's Why You Shouldn't Wait

Life is full of milestones and changes—whether welcoming a new family member, saying goodbye to a loved one, or experiencing a significant life event like marriage, divorce, or retirement. As these moments shape your life, it’s essential to ensure your financial plans keep pace. One crucial but often overlooked task is updating the beneficiaries on your accounts and policies.

Why Beneficiary Updates Matter

Beneficiary designations dictate who will receive the assets in your financial accounts, insurance policies, and retirement plans after your passing. These designations override any instructions in your will, making them a powerful tool in estate planning. Failing to update them could lead to unintended consequences, such as assets going to an ex-spouse or bypassing a new family member.

Accounts to Review

Here are some key accounts and policies where beneficiaries should be reviewed and updated as necessary:

  • Life Insurance Policies: Ensure the right person or entity is listed as the beneficiary of your life insurance policies.
  • Retirement Accounts: Check your 401(k), IRA, and other retirement savings accounts.
  • Bank and Investment Accounts: Many accounts offer a "Payable on Death" or "Transfer on Death" designation, which can streamline asset transfers.
  • Health Savings Accounts (HSAs): Naming a beneficiary here can provide continuity in how these funds are used.
  • Annuities: Review these long-term investments to ensure your preferences are clear.

When Should You Review Beneficiaries?

It’s a good practice to review your beneficiaries annually, but it’s especially critical after major life events, including:

  • Marriage or Divorce: Update designations to reflect changes in marital status.
  • Birth or Adoption: Include new children or grandchildren in your plans.
  • Death of a Beneficiary: Remove deceased individuals to avoid complications.
  • Change in Financial Goals: Revisit your designations as your priorities evolve.

How to Update Your Beneficiaries

Updating your beneficiaries is usually straightforward. Most financial institutions and insurance companies allow you to make changes online or with a simple form. Be sure to:

1. Have Accurate Information: Provide full legal names, Social Security numbers (if required), and contact details for your beneficiaries.

2. Specify Primary and Contingent Beneficiaries: Contingent beneficiaries inherit the assets if the primary beneficiary is unavailable.

3. Review Legal Documents: Ensure your beneficiary designations align with your overall estate plan.

We’re Here to Help

Need assistance updating your beneficiaries? Whether you’re unsure where to start or want to ensure everything aligns with your financial goals, our team is here to guide you. Schedule a consultation today to get the peace of mind that comes with knowing your loved ones and assets are protected.

Don’t wait until it’s too late—take a few minutes today to ensure your beneficiary designations reflect your current wishes.