Let’s talk about beneficiary designations this week. It is important to review your beneficiary designations on your insurance policies, financial accounts, and investments to ensure they are up to date.
Beneficiary designations are an important aspect of estate planning. They allow you to specify who will receive certain assets after your death, such as life insurance policies, retirement accounts, and bank accounts that have a “payable on death” (POD) or “transfer on death” (TOD) designation.
Beneficiary designations can be an effective way to distribute your assets because they bypass the probate process. Probate is the legal process through which a court determines the validity of a person’s will and supervises the distribution of their assets. Bypassing probate can save time and money for your beneficiaries.
It is important to review and update your beneficiary designations regularly to ensure that they reflect your current wishes. You should also make sure that your beneficiary designations are consistent with the overall plan for your estate. If you have a will, it should be coordinated with your beneficiary designations to ensure that your assets are distributed in the way you intend.
If you have not designated a beneficiary or if your designated beneficiary has predeceased you, the assets will be distributed according to the laws of your state of residence. This may not be in accordance with your wishes, so it is important to review and update your beneficiary designations regularly.
* As always, I am not an attorney and cannot offer legal advice but will be happy to refer you to an attorney upon request.
