Have you checked your designations of beneficiaries?

Monday, November 19, 2018

Uncertainty is a part of life and so is risk. You can however mitigate risk by planning ahead an minimize the amount of risk exposure based on your tolerance level in many cases. Just as no one knows when they will get cancer or become ill, so can sudden life changing events. That’s why it is a good idea to check periodically maybe even once a year or so to see if you have your beneficiary designations current and up to date. It’s a good point to check on them regularly. Think of life changing events like marriage, divorce, birth, adoptions. This may require that you have to fill out a new beneficiary form. These forms help you figure out who to leave your money from different accounts in the case of death or dismemberment. And there may be several to consider. If you forget or fail to update your beneficiary designation this can cause your money and other financial assets to someone other than who you intended. Without a designation on file the distribution of your funds and assets usually follows an order of precedence usually based on the state you live it.

If you forget who you designated or can’t find the records then it is often quicker and better to just submit a new designation form as the new one normally overrides the old one on file. Make sure you follow all instructions required and have no cross-outs or appearance of alteration to prevent it from being questioned, disputed or challenged. Also make sure to sign and date the form in front of two valid witnesses before sending or mailing to the appropriate office.

Don’t forget to contact the necessary liaisons if you have applied for retirement benefits or disability retirement if anything else changes.

Beneficiaries can be either individuals or individuals or in some cases person, firms, legal entities and corporation. It can include a trust as well. There are also exceptions.

Often Order of Precedence is based on beneficiaries listed, or a spouse. Then it may fall to children, parents, executor and administrators and next of kin based on state law. Also this is not legal advice. Check with your local laws.

Doing a bit of due diligence to make sure your papers and wills, retirements, bank accounts, pensions and insurance are in order will make determination of who to distribute the ownership of assets to much easier and often avoid some of the costly and time-consuming process of going through probate court for many.