Have You Reviewed Your Beneficiary Designations?

Filed under: retirement planning

Senior couple, with granddaughter,  running though fieldWhen you opened your bank account years ago, you were asked to fill out a beneficiary designation form. You also filled out this form if you purchased life insurance, opened a college savings account, or began stashing money for retirement. But beneficiary designations are not a “set it and forget it” decision. Your wishes may change over time, due to circumstance or personal preference, so it’s important to review your beneficiary designations on a regular basis.

Wills and trusts. Yes, you should frequently review and update your will or any trusts that you may have created. But keep in mind that the beneficiary designations listed on individual accounts will override anything stated in your will, which is why you should also review the following types of accounts on a regular basis.

Bank accounts. You may be able to utilize a Transfer of Death designation on bank account forms. Upon your death, your beneficiaries just need to provide a death certificate in order to access any funds in your accounts. This is an easy way to cover your final expenses and avoid unnecessary delays for your loved ones.

Life insurance. Review the designated beneficiaries on all life insurance policies, and file an updated form with your insurance company as needed. Even if you hold multiple life insurance policies, each one must be updated individually. Remember to follow up with a phone call to make sure your provider received the form and processed it correctly.

Annuities and retirement accounts. Remember to file updated beneficiary forms for each retirement account that you hold, and check to be sure the payment option is appropriate for your situation. For some people who hold numerous accounts, this becomes a bit of a hassle. Rolling everything into one IRA is a viable solution in many cases.

Health insurance savings plans. At the end of your life, you could incur considerable medical expenses. Make sure to update the beneficiary designation on your health insurance savings plan, so that your estate is not billed for unpaid medical bills.

529 College savings plans. The beneficiaries on college savings plans change more often than you might think. If a child does not use all of the money in this account, it can be transferred to another child or even a grandchild. Remember to update the intended recipient of these funds as needed.

Need more information or assistance?  Contact Dubots Capital Management at (888) 605-8363 or jdubots@jpdcapitalmanagement.com.