Are Your Beneficiary Designations Up-to-Date?
Jul 22, 2011

Your will is not the only thing that will transfer your assets to your heirs upon your death. Certain types of assets are transferred directly to heirs through a beneficiary designation. A beneficiary designation is a legal form where you name the person who will receive the assets upon your death. Beneficiary designations override provisions you make in your will. Assets that pass by beneficiary designation include:

• Insurance (life, accidental death and dismemberment, etc.)
• Retirement plans (IRAs, 401(k) plans, Keoghs, etc.)
• Certain annuities
• Brokerage accounts with transfer on death (TOD) designations
• Payable on death (POD) accounts (Totten Trusts)

It's important to review and update your beneficiary designations when you experience a significant life event such as marriage, divorce, death, birth or adoption, and when tax laws change or there is a change in your overall financial situation. Why? Because outdated beneficiary designations (deceased parents, ex-spouses, etc.) could misdirect the flow of your entire estate plan, resulting in unintended heirs and/or negative tax consequences.

If you haven't reviewed your beneficiary designations in a while, now may be a good time to do so. Consult your financial professional to ensure that your beneficiary designations are in tune with your goals.

Prepared by Forefield Inc. Copyright 2009 Forefield Inc.