Your beneficiary designations are a very important part of your estate planning. They are also very easy to forget about when you’ve had life changes. A common misconception is that once you have an estate plan in place, those documents somehow take care of your beneficiary designations. Nope. Beneficiary designations need to be closely aligned with your estate planning documents – the beneficiary designations must match your overall estate planning objectives.
There are different beneficiary designations for different assets: life insurance policies, accidental death policies, investment accounts, retirement accounts, and so on. In each designation, you’ll designate a primary beneficiary and contingent beneficiary. Note that each type of asset has its own tax and non-tax implications so you will need to think about who the beneficiaries should be and I will help you with those decisions. Just keep in mind that the real danger is if you forget to even fill out a beneficiary designation when you sign up with a new plan at your employer, for example, or if you forget change your beneficiary designations and update them over time after life changes, you may end up having certain assets distributed in a way that you did not intend. The same goes to updating your estate planning documents over time and as your life circumstances change. Once you sign your estate planning documents, that’s not the end of it. I will walk you through this process after you’ve signed your estate planning documents.
Please feel free to reach out to me if you have any questions.